The Disciplined Investor: Cigar Butt Market Returns By Gary Dvorchak About this article: Warren Buffett built his fortune early in his career by buying cigar butt stocks. These were usually lousy companies trading at a discount to working capital, or sometimes even cash. The analogy is like a cigar butt on the street -- that is, disgusting but good for one last puff. Warren started his career when investors were still shell-shocked from the Depression era and were willing to let a stock languish below cash value because they'd experienced so much destruction of capital. As is usually the case, the next generation creates a sense of renewal, not having lived through the pain, and Warren and his cohorts could find (and were willing to bet on) these value plays. (I highly recommend reading Alice Schroeder's authorized biography of Buffett, The Snowball, which has a lengthy description of this phase of Mr. Buffett's career.) Unfortunately, time and technology have all but... Or, call us at 1-866-321-TSCM (8726) Monday-Friday, 8 a.m.-6 p.m. ET. Outside the U.S. and in Canada, call 1-212-321-5200. More Stories From RealMoney Durable Goods Up Move Down the Tech Food Chain Jobless Claims Still High Bulls' Tenacity Is the Big Question Mark Should You Buy It? Pharmaceutical Product Development Bad News Trumps All Support for Banks Holds, For Now Bummer, Yields Are on the Rise Money on the Line Makes a Big Difference Structured Products: Unsafe at Any Price MORE STORIES FROM REALMONEY

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