Subject: Re: Bought to close
maybe there is something I'm missing?

Yes, one of them a fact you simply can't know. Me (and at least Max) are in a special tax situation which causes that it would hit us MUCH harder than any non German (and as most of them too) if our Berkshire shares would be called away (have written that repeatedly --- but you are not obliged to read my often white noise only, with little substance posts :-)

So we can only write covered calls with an extremely(!) high probability for them not to be called away. Which is why he recommends strike >=20% above current price (with me as gambler lowering that to >=15%).

Now you could present me with the statistics in how many months BRK did move more than 20% (or my 15%). But that misses one critical point, the point Jim just explained: We sell covered calls not randomly. We only do that if BRK is richly valued. For me this means: Selling covered calls only(!) when Price to Book Value is 1.5 or higher! And then calls not 1 month out (premium would be just a few cents), but calls at 1/2 - 1 year out.

If you can without too much work provide numbers how often BRK moved 20% (or 15%) higher during say the next 1/2 year and 1 year from such a valuation, I would be very grateful, as that's the appropriate test to apply.

In down a lot, you fully participate in the loss. This is infrequent, but gives you a large loss.

We are talking about the strategy of LTBH Berkshire shareholders to make a few extra bucks, people who hold Berkshire through thick and thin and wouldn't sell in this case anyway, whether they wrote covered calls or not.