The basic thought behind any investment, stock, collectable or tchotchke is that it has value and can be resold at a later date; or so thought all of the beanie baby holders. What they were relying on was the “greater fool theory”.
The greater fool theory argues that prices go up because people are able to sell overpriced securities to a “greater fool”, whether or not they are overvalued. That is, of course, until there are no greater fools left.
Investing according to the greater fool theory means ignoring valuations, earnings reports, and all the other data. Ignoring the fundamentals is, of course, risky; and so people subscribing to the greater fool theory could be left holding the bag after a correction. Think GameStop.
So when you are contemplating that stock, or Pokémon card or antique Hummel, who is the greater fool in the situation?