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.