Blind Bid

When an investor invests in they-don’t-know-what-securities.

Yes, blind bids can be as risky as they sound (for individuals), but they don’t have to be (for companies). Usually, institutional investors (think: mutual funds, banks, hedge funds, and other financial institutions) are the ones using blind bids, spending hundreds of millions of dollars.

While they don’t know exactly what they’re buying, typically they do know the general characteristics of the chunk of securities they’re investing in. Like...if it’s mostly safe bonds or mostly growth stocks.

While savvy individual investors would never do such a thing, it’s commonplace among large institutional investors, who still have a pretty good idea of what they’re getting themselves into.