Cigar-Butt Investing
Benjamin Grahams metaphor for buying statistically cheap stocks at deep discounts to liquidation value, accepting that the underlying business may be mediocre or deteriorating but the price is low enough that one or two free puffs of value remain. The strategy persists in narrower modern contexts -- microcap territory, post-bubble international markets, brief windows after major drawdowns -- but the universe of opportunities in modern US large caps has compressed dramatically, and the deeper Buffett evolution away from the approach is itself a load-bearing part of the value-investing canon.
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Related terms
Ambiguity Aversion · Anchored Assumption · Asset Beta · Bank ROE Spread · Banker Pitch Deck · Beta
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