Knife Catcher: Someone who buys in a declining market, attempting to time the bottom and catch a price reversal. Also spelled knifecatcher and knife-catcher.
In a January 2008 article for Slate, Daniel Gross wrote about stock-market investors who attempt to "catch falling knives":
One of the nice things about being a billionaire, or a private-equity magnate, or the CEO of a gigantic bank is that you don't fret about paying retail. If you see an object you desire—a plane, a mansion, a car, a suit—you don't wait for it to go on sale. You just buy it.
In their professional lives, however, such players are attracted to marked-down merchandise like post-Christmas shoppers are drawn to Macy's. Picking through the discard bin and sifting through marked-down inventory of formerly hot products is a highly respected investment strategy. But efforts to catch such falling knives depend on perfect timing. Stick your hand out too late, and you get nothing. Grab the handle at precisely the right moment, and you've got yourself a set of Wüsthofs on the cheap. Stick your hand out too early, and you're simply impeding the blade's fall to earth. Today, several savvy financial operators who tried to catch falling knives in the formerly hot housing and credit sectors are walking around with huge gashes in their hands.
A recent post on Redfin, a real-estate blog, was illustrated with a photo of a bloody hand, a vivid depiction of what happens to knife catchers with poor timing.
When did "knife catcher" originate? I couldn't find a clear answer. The only citation in Double-Tongued Dictionary, often my go-to source for lingo, is dated May 25, 2008, and it's for the phrase "catch a falling knife." The Knife Catchers blog, which documents the implosion of the housing market in Alameda, California (next door to Oakland), began publication on November 2, 2007; its first post explained the term in this way:
Real estate bubble bloggers and commentators often refer to getting involved in risky real estate transactions in post-bubble times as "catching a falling knife." This blog will illustrate the art of knife catching through the eyes of bearish real estate market watchers in California.
The Irvine (Southern California) Housing Blog introduced a Knife Catcher Award on April 26, 2007, dedicating it to "all the knife-catchers stupid enough to attempt to flip a property in this declining market."
This usage suggests that that readers were already familiar with the term. However, I couldn't find any pre-2007 citations.
The original knife catchers were circus entertainers who juggled knives.