Subject: Re: BRK.b 1.674 x book
Currently feeling like I'm on the 95th floor in an elevator on a 100 storey building.
https://www.longtermtrends.net...
Considering some sale options to move to a greater cash position.

There is nothing wrong with cash.

But I wouldn't rush to use that chart to guide the way. It's pretty informative (amazingly so given how simple it is), but only for those who own the broad cap-weight US market or something that statistically resembles it. If that doesn't describe your portfolio, it's probably not the best guide.

If your portfolio is dominated by Berkshire, that's what you need to look at.

Berkshire is more richly valued than usual, but it's not at the level of extremity of the broad market. 1.633 is a pretty impressive multiple of last known book, but we all know that multiple will change a fair bit in the next few days when the statements come out. Maybe something around 1.57 if the price is flat this week?? Using that number, to the extent that P/B is a fair metric of value, the stock has been more expensive than that 5.7% of the time since 2008, around 3 weeks per year on average. I think that's high enough that I don't expect much from the next 6-12 months price wise, but not enough to warrant running for the hills.

Like others, I have written some covered calls, but I am a compulsive tinkerer so that's mostly to keep me from doing something dumb(er).
The problem with selling high and buying back lower is this: the selling high is pretty easy. The buying back is very hard. Nobody knows how low it will go during the next downslope, so when do you pull the trigger and get back in? After a 5% drop? 10%? 20%? 50%? Given the uncertainty, I find I'm always back in again after only a modest drop, meaning the whole exercise left me richer but not by a meaningful amount. I guess you could wait for a drop to the modern era average multiple? Using most recent book that's 1.40 in the last decade, using peak-to-date book it's 1.38. In an untaxed account, selling know and buying then would get you a one time return of 10%, minus however much the value of a share rises in the time it takes to reach that valuation level. Not exactly a life changer.

Jim