r/valueinvesting
Does anyone use net-nets / cigar butts in US stocks? If so what market caps?
Author asks if Graham net-net/cigar butt investing is still viable in US stocks for small accounts and what market caps to target.
- Small capital size provides a liquidity edge in illiquid net-net markets.
- Classic Graham net-net strategy might still offer viable opportunities in 2026.
- Net-net strategy does not scale well past a few hundred thousand dollars.
- True US net-nets trading under 2/3 NCAV might be extremely rare nowadays.
I want to know if classic Graham net-net / cigar butt investing is still doable in US stocks in 2026, from people who've actually done it with real money rather than backtested it. My account is under 100k, so the usual net-net liquidity problem isn't a problem for me. I know it doesn't scale past a few hundred k. For a small account this looks like one of the few spots where being small is an edge instead of a handicap, I believe.
What I'm trying to learn from people who've done it:
\- How did it actually go?
\- What market cap range were you in? Sub-50M? Nano-cap / OTC?
\- How many true US net-nets (trading under 2/3 NCAV) can you even find at any given time these days?