Buffet's view on NCAV "cigar butts"

Hello Serenity,

I've been reading Buffet's 1989 annual letter and noticed that his tone seems to contradict some of the thing's he said in Superinvestors. Would definitely like to hear your insights on how to properly follow Graham's and Buffets principles. Do I look at NCAVs as a philosophy that is sustainable or is it something that really only works sometimes as Buffet said "that kind of approach to buying businesses is foolish".

For example From Superinvestors:

"One sidelight here: it is extraordinary to me that the idea of buying dollar bills for 40 cents takes immediately with people or it doesn’t take at all. It’s like an inoculation. If it doesn’t grab a person right away, I find that you can talk to him for years and show him records, and it doesn’t make any difference. They just don’t seem able to grasp the concept, simple as it is."
" I have never been able to figure out why it’s riskier to buy $400 million worth of properties for $40 million than $80 million. And, as a matter of fact, if you buy a group of such securities and you know anything at all about business valuation, there is essentially no risk in buying $400 million for $80 million, particularly if you do it by buying ten $40 million piles for $8 million each. "

For example from the annual letter:

"It's far better to buy a wonderful company at a fair price than a fair
company at a wonderful price. Charlie understood this early; I
was a slow learner. But now, when buying companies or common
stocks, we look for first-class businesses accompanied by first-
class managements."

Dear Gambit,

Thank you for your forum post!
Buffett appears to have evolved over the years, from being a cigar-butt bargain hunter to following Graham's Value Investing principles in their entirety.

Serenity's article - Is Warren Buffett A Value Investor? - discusses the topic in greater detail.

Graham Resources