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Strategies & Market Trends : Value Investing

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Lance Bredvold

S. maltophilia

To: A1111 who wrote (71453)	10/28/2022 12:32:34 PM
From: petal	2 Recommendations Read Replies (1) of 78625

Buff has said many times that he would recommend the cigar butt method to anyone who was working with 1 mn USD or less. And he has also said on multiple occasions that if he were to start all over again he'd do it just the way he did it; however, he has implied that he'd probably abandon the cigar butt approach a little earlier than he did. Which makes sense; for example, to acquire completely a shit co. like Berkshire itself was at the time, appears like such a stupid idea that it's hard to believe that Buffett would do such a thing. The cigar butt method only works if you sell the cigar butt in 1-2 years – since it's a poor &/ dying business, it destroys value (i.e. your money as an owner) over time. To do a buyout of such a co., appears ludicrous. So one important lesson from Buff: don't buy a cigar butt for keeps; don't "smoke your cigarettes down to the bone".

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