Sentences with phrase «cigar butts selling»

One mistake was that, by focusing on cigar butts selling for low single - digit multiple of earnings or a low price in relation to liquidation value, I missed out buying into higher - quality businesses like Asian Paints and Pidilite, which compounded capital at high rates of return for a long time.

Not exact matches

I believe that Prof Graham always suggested selling a cigar - butt after 2 years (ie, if the price hadn't already increased by 50 %).

His cigar - butt strategy involves the purchase of net - net stocks - businesses selling below their liquidation value as found using the following equation:

This is despite the fact that, as early as 1965 and while working under Graham, Buffett was becoming aware that the latter's strategy of buying cheap stocks (what Graham called «cigar - butts», or companies selling for less than their net working capital) was not ideal, for it did not consider the quality of businesses, and just a stock's cheapness.

I guess that is where Ben Graham was getting rules like his «always sell cigar butts if they appreciate by 50 %.»