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.
INVESTOPEDIA EXPLAINS '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.
The highest and lowest prices that a stock has traded at during ...
A stock that appears to be cheap because the stock has been trading ...
A financial security or other type of investment that is selling ...
The lowest point or price reached by a financial security, commodity, ...
An investor who looks for bargains among stocks whose prices ...
A reduction in the ownership percentage of a share of stock caused ...