Saturday, May 6, 2023

Ever Hear About Cigar-Butt Investing?

Dear Loyal Reader,

Warren Buffett once remarked that investing large sums of money can be an “anchor” for him.

This is because he can’t always get into the best opportunities he wants if those opportunities are too small.

But this hasn’t always been the case.

Back when Buffett was just starting his career, he invested in several smaller, under-the-radar stocks that went on to pay off huge for him.

One such case is that of Western Insurance Securities. In a column titled: “The Security I like Best” for The Commercial and Financial Chronicle in the 1950s, Buffett wrote:

You have to turn over a lot of rocks to find those little anomalies. You have to find the companies that are off the map — way off the map. You may find local companies that have nothing wrong with them at all. A company that I found, Western Insurance Securities, was trading for $3/share when it was earning $20/share! I tried to buy up as much of it as possible. No one will tell you about these businesses. You have to find them.

Buffett called his off-the-map and under-the-radar strategy: “cigar-butt investing.”

And in his 2014 letter to Berkshire Hathaway shareholders, he said:

My cigar-butt strategy worked very well while I was managing small sums. Indeed, the many dozens of free puffs I obtained in the 1950s made the decade by far the best of my life for both relative and absolute performance.

Well, here we are more than 70 years later. And I can tell you, Buffett would absolutely COVET the five small-cap opportunities I’ve uncovered for you today.

Because each one of these stocks is currently trading well below $5 a share.

And each one of them rates high as a strong buy on my Green Zone Power Ratings system. Including very bullish scores on value — a key metric, of course, for Buffett.

That’s why, according to my research and ratings, I believe each one of these five, $5 stocks could easily soar as much as 500% or more over the next year.

So no disrespect to the Oracle of Omaha…

But I WILL tell you about these opportunities today.

And for a limited time, you can get all the details on these five small-cap stocks right here.

Click here if you are unable to see the image.

Regards,

Adam O’Dell
Chief Investment Strategist, Money & Markets


 


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