First of all, cigar-butt investing or deep value is a quantitative-value strategy, the focus is on the net returns of the portfolio, not individual picks. When you invest in a portfolio of deep value stocks, some stocks will out-perform better than the rest, and some will disappoint.
In a deep value portfolio, you will have stocks generating 100% return while some losing -50%. Your long-term track record depends on the yearly net returns of the entire portfolio. Hence to execute this strategy perfectly, you need to diversify adequately and restrict a position limit to each stock so that if one stock fails, it doesn’t drag the entire portfolio down. This is why investors like Ben Graham and Walter Schloss advocate diversification while Warren Buffett concentrates his capital in a few high-quality stocks.
I personally have my own deep value portfolio which I’ve been managing for a few years now. But opportunities to invest in these stocks are becoming limited. So for me, I don’t limit myself to stocks that fits a certain ‘formula’ (NCAV or NNWC eg). I widen my scope to stocks that are still considered undervalued, strong financials and upside catalyst. On top of that, I’ve also widen my scope beyond SG and are currently looking for opportunities within Asia and US. If you’d like to learn more about deep value, you can download my guide here.