InvestorQ : What is meant by bottom fishing in the stock markets?
Nisha Chandani made post

What is meant by bottom fishing in the stock markets?

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Nisha Chandani answered.
3 years ago
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The very word bottom fishing appears to be quite seductive to investors. There is something very Buffettian about bottom fishing for stocks. It is the dream of every trader to buy at the bottom and sell at the top. In practice, though, it rarely happens and these kinds of theories only exist on paper. P/E and valuations are just a plain theoretical approach to buy stocks of deep value. In reality, the time for bottom fishing is when the last optimistic bull has been squeezed out of the markets. Normally, these are the times when panic is at its peak. Imagine trying to bottom fish when everyone was in a state of panic in March 2009. You would have ended up with crazy profits but convincing yourself to do that is the most difficult thing. The paradox about bottom fishing is that it has to be done when you are mentally least prepared to bottom fish.

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