Sometimes It Can Pay To Go 'Bottom Fishing'
To most stockmarket professionals,/bottom fishing"ÛÓbuying stocks whose prices have collapsed in hopes of making a big score on the reboundÛÓhas the same appeal as playing long-shot horses has to most professional gamblers. That is, none.</br></br>stock after it starts moving up powerfully. And more conventional money managers are embarrassed to have a disgraced stock in their published portfolios where their peers and clients can see it. Many fund managers automatically sell any stock that falls 15 percent or 20 percent.</br></br>But for small investors, a little bottom fishing can make a lot of sense. Certainly, your long-term moneyÛÓfor retirement or college-should be in strong stocks , and diversified mutual funds. But you shouldn't deny yourself the. fun and profit of a big killing In a company thetpros hate. ;. ,^'The'main'reason bottom fishing works is that when bad news hits a stocli, the market frequently overreacts: Vou can pick up te^^ad^is stamp^to get t*^Tgood'recent examples Philip Morris. In 1992, it was the nationÛªs most profitable cam[kr)'y\'; hitting a high of $85 a share. ÐÊThen it lost-nearly half that as the market got the notion that brand</br></br>A new threat in the Persian Gulf boosted energy stocks Friday, but there are more reasons to like them as havens in a stormy market.</br></br>First, if inflation heats up, these resource companies should fare 'better than the market as a whole since they own appreciating goods.