An investor who is on the wrong side of a stock for an extended period of time, with the consistent belief that he or she is in fact correctly predicting its direction, despite strong evidence to the contrary. Typically, this person loses most or all of his or her
money in the process.
The term comes from
people in soup lines during the Great
Depression, who held potato bags filled with their only possessions.
"All the retail investors who bought priceline.com in early 2000
saw their investment value
shrink 99% over the following year. They were the
bag holders the smart traders unloaded their shares onto."