falling knife

A stock whose price is currently undergoing a steep or long-standing decline.
Example Citation:
"Let's look at Oak Brook-based McDonald's Corp. (MCD). The stock closed Friday at $ 33.38 a share, up $ 1.38 on the week, but far off its 52-week peak at $ 49.56, touched last November. A falling knife."
— Mitchell Zacks, "When a stock's price falls, those selling may be right," Chicago Sun-Times, August 6, 2000
The term "falling knife" comes from an old Wall Street adage: "Never try to catch a falling knife." It means that it's both dangerous and foolhardy to buy a stock that's falling because chances are it's falling for a reason and will likely continue to do so. This maxim has now become so ingrained (it goes back in print to at least 1986), that we're starting to see references to just "falling knife," without the rest of the saying.
Related Words: Category:

New words. 2013.

Look at other dictionaries:

  • Falling Knife — A slang phrase for a security or industry in which the current price or value has dropped significantly in a short period of time. A falling knife security can rebound, or it can lose all of its value, such as in the case of company bankruptcy… …   Investment dictionary

  • falling knife — noun A stock whose price has dropped rapidly …   Wiktionary

  • catch a falling knife — verb To buy an instrument whose price is falling rapidly. Buying that stock now would be catching a falling knife. Wait until you see capitulation …   Wiktionary

  • Falling Into Infinity — Album par Dream Theater Sortie 23 septembre 1997 Enregistrement 2 juin au 30 juillet 1997, Avatar Studios, New York Durée 78:20 Genre(s) …   Wikipédia en Français

  • Falling into Infinity — Album par Dream Theater Sortie 23 septembre 1997 Enregistrement 2 juin au 30 juillet 1997, Avatar Studios, New York Durée 78:20 Genre …   Wikipédia en Français

  • Falling Down — This article is about the film. For other uses, see Falling Down (disambiguation). Falling Down …   Wikipedia

  • Knife of Dreams — infobox Book | name = Knife of Dreams orig title = translator = image caption = Original cover of Knife of Dreams featuring Perrin Aybara facing down Aes Sedai Galina Casban with Gaul and an armsman looking on author = Robert Jordan cover artist …   Wikipedia

  • Knife juggling — This article focuses on one aspect of toss juggling. For a more general discussion of juggling, see the main article: Juggling Knife juggling is a variant of toss juggling using special knives which are thrown and caught. Although knives are… …   Wikipedia

  • Falling Toward Apotheosis — Infobox Television episode Title = Falling Toward Apotheosis Series = Babylon 5 Caption = Season = 4 Episode = 4 Airdate = 25 November 1996 Production = 404 Writer = J. Michael Straczynski Director = David Eagle Guests = Wayne Alexander (Lorien)… …   Wikipedia

  • Knife catcher — A knife catcher in economics is a term for a purchaser of a good at a point when the price of that good is declining sharply in value. [cite web url=http://www.slate.com/id/2181184/ title=Beware of Falling KnivesIt s tough to make money off the… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.