Bottom fishing: You bought when everything was going to hell in a hand basket, like in mid-late March.
It's been a while since my last entry in this particular thread, not because I'm not trading, but because many of my bottom fishing stocks have been penny dreadfuls and ET policy is not to encourage penny stock announcements. Friday was a short trading day Christmas eve and I took a bottom fishing trade on AMP.AX at 99c about 1 hour after mkt open. A few weeks ago I took a bite at AMP @ $1.10 but bailed quickly when the trade went red, so this my second attempt. What piqued my attention to take this trade were three things, they made an announcement of selling off part their business for over $500 mil. Trading at a significant round number. There was substantially heavy trading in the first hour of the day and it appears we may have a bottom here, that obviously relying on hope. This trade has broken one of my rules, I will avoid stocks which have collapsed more than 7x their HHV. I've made an exception this time due to fact AMP has a mkt cap of $3bill so there should be significant institutional support in theory. Whether the knives are out to take a slice of the cake remains to be seen. The stock has a PE of 27 and carrying substantial debt, so imo there's a good chance this could fall further, maybe to 50c, but I'll probe it with this gamble and bail again if needs be. Santa rally season is on my side atm.
Well, since you bumped this thread up The last time I heard the term "Bottom Fishing" was after Kraken's 2nd flash-crash. A bunch of people got liquidated and it caused one hell of a mess with lawyers and compensations etc. Turns out, crypto exchanges have this happen all the time, which is why a lot of people 'bottom feeders?' put out very small limit-orders to snatch exactly this type of glitch when it occurs. And along that line, I remember a few months before Covid showed up, there was a day where Enbridge stock (I believe on the Toronto Exchange) flash-crashed down in a huge spike. I can't remember the drawdown now exactly, but I'll roughly say 50%. I can only assume that in THAT case, some institution must have done a hell of a fat-finger order and sent out a number of block-orders at market price.... or they had a real nasty bug. Or... some hedge fund got liquidated that moment. A hell of a nice gift if you could time those right... probably it all went to HF traders?
Closed the day at 96c. Trouble with AMP, as a financial company they had a bad reputation as rip off merchants. They were in deep shit many years ago and it seems they have not learnt any lessons. The only way to sort this type Co is sack the entire board. Often the rot is entrenched at the top (full of old bastards hanging onto their jobs) and no amount of fiddling will sort the problem. Just my opinion.