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Exhibiting or feeling great or offensive satisfaction with oneself or with one's situation (dictionary definition).
The exhibitor will always have a light smile or smirk and may have their arms crossed in front of them. Also in general they will have slightly closed eyes, but fully closed eyes is very possible as well.
For the fighting game player, see Smug (gamer).
See also
The following tags implicate this tag: doyagao (learn more).