Definition of Bottom fishing:
Bottom fishing refers to investing in assets that have experienced a decline due to intrinsic or extrinsic factors, and are considered undervalued. A bottom fisher, a moniker given to investors who practice the bottom fishing strategy, speculates, using either technical or fundamental analytical techniques, that an asset's depressed price is temporary and will recover to become a profitable investment over time.
At its core, bottom fishing embodies the tried and true formula to trading the markets successfully, namely, buying low and selling high. Essentially, seek and invest in value. Many prominent value investors, such as Warren Buffett and Benjamin Graham, have amassed fortunes by purchasing assets that are trading at low valuations relative to their intrinsic worth and waiting for prices to recover to normalized levels.
A stock selection strategy that focuses on cheap stocks.
How to use Bottom fishing in a sentence?
- Bottom fishing refers to investing in assets that have experienced a decline, due to intrinsic or extrinsic factors, and are considered undervalued.
- Bottom fishing can be a risky strategy when asset prices are justifiably depressed or a savvy strategy when asset prices are trading at irrationally low valuations.
- The most popular bottom fishing strategy is known as value investing and its most famous practitioner is Warren Buffet.
Meaning of Bottom fishing & Bottom fishing Definition