Bottom Fishing – A Wealth of Common Sense

A reader asks:

What are some stocks that seem to have been thrown out with the bath water?

Despite the minor correction in 2026, the US stock market is still up around 19% over the past year.

But there are so many individual names that are so lost beneath the surface.

Over the past 12 months, nearly 30% of stocks in the Russell 3000 have fallen 10% or more:

One in five stocks is down 20 percent or worse. This again occurred during a nearly 20% increase in the overall market.

This is the agony and exhilaration of investing in the stock market. There is always a bull market and a bear market somewhere.

There are plenty of household names in the down pile too.

Let’s examine some stocks from different groups to see where potential opportunities may lie.

First, software stocks have been in the crosshairs of AI lately. like companies Adobe, Sales force and The entire CoreWeave is in the midst of a collapse:

Are these stocks a scream buy or have they completely pierced the AI ​​moat?

You can also look into private equity managers. KKR, Apollo or Karataş:

Has the private credit route been overrated, or is this just the tip of the iceberg before a real credit event?

You can look at credit card companies like Capital One, Ally, American Express, Visa and Mastercard:

These stocks aren’t getting hit that badly, but could this herald a slowdown in the economy (finally)?

If you fancy even bigger declines in finance, fintech stocks have been hit even worse:

Robinhood and Coinbase are certainly feeling the pain of the crypto crash, while Block (formerly Square) has been in a nuclear decline for several years now.

Feeling lucky?

How about some blue chip companies with timeless brands that are well below their peak?

Nike, Disney, and Target have all been experiencing near-catastrophic declines for several years:

He also has a stock of mega caps in his casualty closet. Microsoft, Meta and Netflix are nearly a third off their highs:

I’m not very good at wading through rubble like this, but with a BB gun to my head, mega hats are probably the safest bet.

All of these stocks have experienced big declines in the past and have always pulled back. Maybe it won’t happen this time… I don’t know.

Bottom fishing is interesting because there are many historical examples of a school being killed and coming back roaring from the dead.

This is the dream of contrarian investors.

However, there are some things to consider if you’re planning to dip into bombed names:

• You may need to be patient. Very patient.
• You need a plan beyond buying whatever drops in price. What is the value of the company? Maybe it fell for a good reason.
• You can never have perfect timing for the bottom unless you are extremely lucky. Plan accordingly.
• Being a contrarian investor can be lonely because other investors like to pile on the worst names and tell you why money is dead.
• Not all individual stocks return. Actually, most stocks are not good in the long run.
• Trends can last much longer in either direction than most investors think is possible.

Jeff Bezos once said: “Detractors are often wrong.” This isn’t a bad foundation.

Bottom fishing can be fun, but it is not for the faint of heart.

I addressed this question in this week’s new Compound Ask:



We also answered questions about selling the Mag 7, 24/7 trading, why valuations are higher, and how to produce financial content as a financial advisor.

Further Reading:
How to Own the Best Stocks?