cigar butts

Noun

cigar butt (plural cigar butts)

1. Used other than figuratively or idiomatically: see cigar, butt.
2. (figuratively) A company bought under the premise of value investing, from the idea of an inefficient attention allocation of market participants present in shares of a quality where almost no value is left, making them comparable to a cigar end left on the pavement where the last puff, though it be ugly and moist, is free.
   • However, this bargain-hunting strategy contains an inherent flaw that limits the upside. Once Buffett's capital base grew large enough, cigar butt investing was no longer feasible. Beyond a certain scale, he needed to shift from maximizing the return of capital to maximizing the return on capital....2023 August 21, Andrea von Schalkwyk, “Why Buffett Crushed His Cigar Butt Habit on Munger's Advice”, in GuruFocus, archived from the original on 11 Feb 2026