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Are there simple and reliable rules to follow for predicting stock price momentum? not accurate, but good enough. Momentum seems to exist following good or bad news. For example, BRK seems to be in a upward momentum now, how high the price could go (I'm guessing $370) or how long the momentum would last? Same for DG and DLTR on the downward.

' how high the price could go (I'm guessing $370)

Since December 2012 (I call that the 'modern era' of p/b multiples) the highest trailing p/b multiple I show is 1.597x. With trailing bv at 248.20, one could say $396 is possible between now and the end of Q3.

Since July 2018 (when the 'published' buyback threshold was removed) the highest trailing p/b multiple I show is 1.574x. So maybe $390 is all that's possible between now and end of Q3.

I personally have sold a few more Jan24 covered calls this week with breakeven in the mid $380s. If the current Q2 bv remains peak book for another quarter or two, 380 would be a price to peak bv of 1.53x and historically BRK only trades at those valuations less than 3% of the time. It feels like a decent bet to pick up a few dollars on shares I have no plans to ever sell. All in tax free accounts so if I'm wrong I just buy the shares/contracts back and life goes on.

Jeff

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Berkshire Hathaway FAQ

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