Frequently attributed to Sigmund Freud, whose theories of psychoanalysis and psychosexuality often explained various human behaviors in terms of sexual desires, and thus a cigar could be imagined as a phallic symbol indicating some inner trait of the person smoking it. This phrase reverses this concept, admitting that sometimes the cigar really is just a cigar, and that not everything is always so deep as it could be made out to be.
The medical journal Psychiatry cited in an issue from 1950 that this "famous" quote was uttered by Freud 30 years earlier, although neither any written records from Freud himself, nor especial widespread use from that time period before 1950, could be found. Alan C. Elms explains this attribution as most likely apocryphal, although the origin of the phrase in psychoanalysis is still possible: Eric Hiller in 1922 published a psychoanalytic article suggesting that cigars indeed have a phallic symbolism, so this term's coinage as ironic phrase making light of this claim remains a possible origin.