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. Value Trap

    A stock that appears to be cheap because the stock has been trading ...
  3. Dilution

    A reduction in the ownership percentage of a share of stock caused ...
  4. 52-Week High/Low

    The highest and lowest prices that a stock has traded at during ...
  5. Bottom

    The lowest point or price reached by a financial security, commodity, ...
  6. Bottom Fisher

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