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An investor who retains a position in an exceedingly security that loses value until it becomes worthless is spoken as a “bag holder” informally. Typically, the bag holder will obstinately hold onto their holding for a protracted time, during which the investment loses all of its worth. The phrase “bag holder” refers to people who held potato sacks that contained their few belongings while waiting in soup lines during the good Depression. Since then, the phrase has become commonplace within the investment language. A over the counter stock investment blogger jokingly made the joke that a support group named “Bag Holders Anonymous” should be established.
An investor who retains a “bag of stock” that has lost value over time is stated as a “bag holder.”
Consider an investor who buys 100 shares of a technology start-up that has just gone public. The share price first increases during the initial public offering (IPO), but it soon starts to say no as soon as analysts start to doubt the viability of the business concept.
The company is clearly having trouble, as seen by subsequent dismal earnings reports, which cause the stock price to further decline. A bag holder is an investor who is steadfastly holding onto the stock despite this troubling series of events.
