Bottom Fishing


DEFINITION of 'Bottom Fishing'

Investing in stocks that are cheap because of a problem with the company or the economy. A bottom-fishing investor speculates that the stock's depressed price is temporary, will recover and make for a profitable investment. Bottom fishing is a risky strategy because the company's stock price is depressed for a reason and may not bounce back.

BREAKING DOWN 'Bottom Fishing'

Here are some examples of bottom fishing:

-Investing in the stock of an aluminum company when aluminum prices are depressed.
-Buying the stock of a container shipping company during an economic depression.
-Investing in a print media company when the Internet is putting such companies out of business.
-Buying shares of a bank during a financial crisis.

In each of these cases, it is unclear when or if the stock's price will recover.

  1. Undervalued

    A financial security or other type of investment that is selling ...
  2. Bottom Fisher

    An investor who looks for bargains among stocks whose prices ...
  3. Bottom

    The lowest point or price reached by a financial security, commodity, ...
  4. Value Trap

    A stock that appears to be cheap because the stock has been trading ...
  5. 52-Week High/Low

    The highest and lowest prices that a stock has traded at during ...
  6. Dilution

    A reduction in the ownership percentage of a share of stock caused ...
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