Subject: Re: OT: Fair Value for RSP, QQQE
Since this is the Berkshire board, the likely returns for [the remainder] of 2024 don't look so hot.
Valuations based on the usual things like book and peak-to-date book are somewhat above average, so short term likely returns are commensurably lower.
Based on one metric (peak to date book but continuing to rise slowly during book dips), Berkshire is 8.6% more fully valued than its average since Jan 2008. The average one year real total return since then has been about inflation + 8.2%. So, the two kinda cancel out for a year and the implied one year return after inflation is in the 0-1% range.
That "forecast" will be wrong, but the notion is that it's a toss-up whether that's too high or too low.


Just today I started looking at covered calls. The Jan '25 370 call (~$29) has a break-even of about $399, which is +10%. The Jan '25 380 call (~23.50) has a break-even of about $403.50, which is +11.3%

I always find the trade-off between premium and break-even to be torture. Not to mention expiry.