CIGAR BUTT Meaning and
Definition
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A cigar butt is a term commonly used in finance and investment to describe a situation or investment opportunity where a security or company is priced significantly below its intrinsic value, presenting the potential for substantial gain. The term draws an analogy to a partially smoked cigar, suggesting that although the remaining value may be small, it is still worth considering.
In the investment context, a cigar butt refers to a stock or security that is considered undervalued and neglected by the broader market. It implies that the price of the security has fallen to a level where it represents a potential bargain. Investors using this strategy typically seek out securities with low prices relative to their fundamentals, such as low price-to-earnings ratios or low price-to-book ratios.
The term further emphasizes that even though the investment opportunity may not be glamorous or widely popular, there is still value to be derived from it. Investors adopting the cigar butt approach often target companies that may be experiencing temporary setbacks but possess solid underlying assets, competitive advantages, or potential for turnaround.
It is important to note that the cigar butt strategy requires careful analysis and due diligence to ensure that the undervaluation is rooted in fundamentals and not a reflection of a deteriorating business model or other negative factors. Investors employing this strategy aim to buy these "cigar butts" at low prices and profit as the market recognizes and corrects the undervaluation, often resulting in substantial returns.
Common Misspellings for CIGAR BUTT
- xigar butt
- vigar butt
- figar butt
- digar butt
- cugar butt
- cjgar butt
- ckgar butt
- cogar butt
- c9gar butt
- c8gar butt
- cifar butt
- civar butt
- cibar butt
- cihar butt
- ciyar butt
- citar butt
- cigzr butt
- cigsr butt
- cigwr butt
Etymology of CIGAR BUTT
The etymology of the term "cigar butt" is derived from the combination of two separate words: "cigar" and "butt".
- Cigar: The word "cigar" originates from the Spanish word "cigarro", which came from the Mayan term "sikar", both meaning "to smoke rolled tobacco leaves". The Spanish word was later adopted into English.
- Butt: In this context, "butt" refers to the stub or the end of a cigarette, cigar, or any tobacco product that remains after smoking. The origin of the word "butt" in this context is uncertain. It may have originated from the Old French word "but" meaning "end" or "target", or it could be related to the Middle English word "butte" meaning "target" or "boundary". Over time, "butt" has been used to refer to the remnants of smoked tobacco products.
Similar spelling words for CIGAR BUTT
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