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>but if they liquidated the company, they would have more than that in the cash alone! Someone has to buy that though, right? I'm sure a ton of people would b

>but if they liquidated the company, they would have more than that in the cash alone! Someone has to buy that though, right? I'm sure a ton of people would buy a lot of pieces of a liquidated Apple, but what other effects on the economy does a suddenly-liquidated Apple have since it's such a major company? Does Apple take any other companies with it? The only way to insulate yourself completely and still benefit is to only own Apple shares, otherwise, Apple going down is going to affect the rest of your position. What if they continue to trade below the cash that they are holding for 10+ years? Plus, since they use tax havens, what happens to that cash if someone did liquidate Apple? Wouldn't it have to come back to America and would be taxed heavily?

valuearb 9y ago
Real cigar butts are usually tiny companies that no cross effects on the economy at large. Their risk is that they hold the cash for 10 years, or worse, burn it all trying a whole new business model (self driving cars!). The returns can be very good, but you do need to diversify out to 10 to 20 holdings to limit risk from one going south or taking forever. Buffett stopped investing in cigar butts because his portfolio got too big and the risk/return ratio wasn't always great. His big change was leaving Graham's philosophies for Mungers, and focusing on getting great businesses at a fair price rather than fair businesses at a great price.