Subject: Re: out of the gate strong
I did mean to say put writing.

I have done a lot of cash-backed put writing. Around 100,000 contracts over the years. Since dates and strikes are staggered very few contracts will ever get assigned in any given period, so $1 in cash can back up considerably more than $1 in puts liability without much problem, so a bit of leverage adds to the charm financially.

But only rarely have I done it with Berkshire...the premiums never seem to be particularly high. The stock is perceived (rightly) as not being very likely to make a big move.
I averaged 12%/year on them without leverage, but it was that good only because I was a bit lucky or skilled at choosing my moments. Typically the return on the puts was only something like 2% better than simply holding the stock in the same intervals, a bit like getting a dividend. And it was a lot of work.

As mentioned, I plan to get back into writing puts against Berkshire soon, as a way to make a little bit of money and simultaneously automatically get more stock at a good valuation level. But I don't expect much of a return from the process, as the entry prices that interest me right now are well below the current stock price. I won't be doing it when the stock price gets cheap again...at that point I'll be buying stock, or getting it assigned.

Jim