Subject: Re: Bought to close
The key is that these rosy views only work if you never write a call unless the stock seems richly valued to start with.

Which brings us back to a thing that was said a while ago.
*) When BRK is "low valued" (e.g., P/B ~1.35) put on leverage (buy DITM call)
*) When BRK is "richly valued" (e.g., P/B ~1.55) take off leverage and possible go to negative leverage (sell covered call)

But that's not writing covered calls for income (2%-4% a month). That's more like card counting at Blackjack--go big when the odds are in your favor.

You don't have to make money in both bull and bear markets. It's good enough to just make money in bulls and not lose too much in bears.

Seems to me that the thinking behind the "CC's for income" crowd is somewhat similar to the thinking of the "invest for dividends" crowd. There are better ways to accomplish the goal of getting periodic cash.

Plus there's some magical thinking going on here. 2-4% a month is 24%-48% a year. There is NO POSSIBLE WAY that the big players in the market are ignorant of a strategy that consistently makes 24%+ a year, let alone a simple strategy that makes that much.

That work I did in examining monthly returns was an entertaining intellectual exercise. It was fun, and gave me something to do beside watching Youtube videos for a couple of days. Also convinced me to stay completely away from trying to make money by messing with short calls and puts. Too complicated for me.

I had NO IDEA that large monthly moves were so common. 8.5% of months had gain more than 10%? Average gains of those months was (10% + 14.9%)? Astonishing.

I did know, from Meb Faber, that large up months and large down months often happen together. A couple of cases with BRK-A: -14.33%, +16.18%, -10.33%. And -14.06%, +30.00%. And -13.73%, +10.45% -- that was the last >10% month, on July 2022.