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Recently I've been putting in a BRK-B daily sell limit order reaching for a pop. At 500, then 505.
Almost got it yesterday, the high was 504.95. Soooooo close.

The 500 would have been hit a couple of times at the open, but my order wasn't in yet.
So yesterday after the close I put in a sell at 505, for the next day.

Then in the evening I thought, "Heck, get the sell order in at 510 and then I can change it down to 505 when I log in mid-morning."

BOOM! Got filled at 510.

Now watch BRK-B march up to the Analyst price target of 557.

BTW, I learned my lesson about selling covered calls on BRK some time ago. Never again.

BTW, I learned my lesson about selling covered calls on BRK some time ago. Never again.

But calls can be used simply as a tool (I don't use calls to provide "income" because I don't believe that the buyers of those calls are so generous as to provide me with an income without receiving something valuable in return). In this case, if you are TRULY willing to sell shares at 510 because you think it's a good price now, you could choose to sell, for example, March 7, 2025 510 calls for about $4.50 and possibly end up receiving a net of $514.50 instead of $510 for your shares. It's not much more, but it's still a little bit more.

And since you're not selling all of your Berkshire anyway, even if the stock drops and doesn't end up selling for $514.50, well no big deal, you keep the $4.50 for your trouble, and you keep your stock as usual.

For people who absolutely positively have to exit the position, for example you're closing on a condo sometime next week and you need $X in cash to be present in your account for closing, then of course you need to sell the stock the usual way. But most of us here are talking about "playing around on the edges" of our positions.

I woke up and saw 510, and thought, "I thought I was done selling, but maybe I'd sell a bit more if I could get $515. I saw it was back to 505, and figured it wouldn't fill. Vanguard did a good job, and got me in on a really little spike, much to my surprise. OK, no more until what, $525?

Who is buying???

Nobody on this board for sure. Either holding or selling (I recently sold as much as never before).

And, again my observation, though apparently not interesting anyone here: Berkshire lately is often doing the opposite of the S&P --- and, as today, even if on day it does not moves in the opposite direction it still behaves were differently.

Just have a look at a 1 week or 1 month chart of both. Speaks for itself.

Who is buying???

I suspect there is a fair bit of "safe haven" migration. Without getting into politics, it is hard to deny that these are "interesting" times. U.S. consumer confidence deteriorated at its sharpest pace in 3-1/2 years. I already have a lot of the BRK safe haven, so am accumulating some cash. I'd be accumulating cash a lot faster if WEB was doing that for us internally.

“ Who is buying???”

Korean, Japanese, chinese?

" “ Who is buying???”"

I would NEVER say it here for fear of being jumped, but, would T and Ts time be better spent optimizing the performance of our current wholly owned companies rather than trying to beat index funds? Asking for a friend, so don't hate on me. Thank you.

Well, P/B-1.71. Mr. Market has served up a pretty good offer imo, esp. since we have entered the drawdown phase. We sold a bit more BRKB, enough to cover our living expenses thru year end.

" Well, P/B-1.71.'

Still no updated 8 K from Buffett updating his gifting plans so apparently, he wasn't a vigorous buyer at 440 and he isn't an aggressive seller at 510. THATS a pretty wide gap. WHY do friends make me post these observations UNstable genius?

I just realized that this latest run-up gives me a 10-banger gain. My fist BRK purchase was Feb 20, 2009, an A share for $75,497. The old board convinced me to jump in. Coulda shoulda bought more.

Ahh, one of those newbies which just bought their first share!

P.S.: 19.Oct 2000, $54k

Yikes, looking back at that 2000-2009 stretch. That’s a CAGR of about 4.5%.

Or how about June 1998-June 2012 time span? A CAGR of 3.25% over 14 years, before the parabolic rise of the last 13 years.

It’s always a good reminder for me to remember how long Berkshire can sort of flatline for a decade or so.

" Yikes, looking back at that 2000-2009 stretch. That’s a CAGR of about 4.5%.

Or how about June 1998-June 2012 time span? A CAGR of 3.25% over 14 years, before the parabolic rise of the last 13 years."

You left out, how much stock did Buffett buyback during those years? In what year did Buffett finally authorize a buyback at all? What was the LIMIT for the original buyback? From 2007 ish on how much of Buffett's life's work did the foundations sell around BV or at slight premiums to BV into the public market? Asking for a friend, so no one jumps me. PLUS, Uncle Warren wasn't giving out stock options like candy on Halloween, so buybacks would have actually reduced the issued and outstanding. HOW could the entire shareholder base have not been begging for buyback's back then, how? I let it bother me to the tune of tens of millions of dollars. Oh well. Thank you.

Yikes, looking back at that 2000-2009 stretch. That’s a CAGR of about 4.5%.
Or how about June 1998-June 2012 time span? A CAGR of 3.25% over 14 years, before the parabolic rise of the last 13 years.
It’s always a good reminder for me to remember how long Berkshire can sort of flatline for a decade or so.

I suspect, but don't know, that these would be the times when the DITM LEAPs for 2X leverage would work well. I don't know what the P/B was in those days.

Yeah, testfol.io for June 1998-June 2012 says 3.86% for BRK and 2.88% for SPY.

Interesting charts. BRK crashed in 1999-2000 while SPY zoomed up, then crashed down in mid-2000 to 2003 while BRK recovered.
Both got creamed in 2008-2009.
Since then they moved like twins.

Yikes, looking back at that 2000-2009 stretch. That’s a CAGR of about 4.5%.
Or how about June 1998-June 2012 time span? A CAGR of 3.25% over 14 years, before the parabolic rise of the last 13 years.
It’s always a good reminder for me to remember how long Berkshire can sort of flatline for a decade or so.


It's also a good reminder that even for a long hold, entry price matters. There are no long stretches of flat or poor results for purchase at valuation levels that are average or below.
As others note, that's why Berkshire's buybacks don't happen every quarter.

Jim

Yikes, looking back at that 2000-2009 stretch. That’s a CAGR of about 4.5%
......
how long Berkshire can sort of flatline for a decade

Absolutely not!

You got it completely wrong as to that result one can only come by carefully selection as endpoint the very low at the beginning of Jan 2009.

Choose any endpoint in that stretch or the following years other than one in 2008/9 and you see a continually rising Berkshire from when I bought 19.Oct 2000***.

***The day Cramer yelled "Berkshire Hathaway? There is only one thing to do: SELL! SELL! SELL!" - - - with me then knowing it's time to buy.

good reminder for me to remember how long Berkshire can sort of flatline for a decade or so.

Hardly a flatline period, it soared from around 50k to 140k and crashed with the rest of the world to 72k. We all knew the intrinsic value had grown over that spell. It just took some confidence to jump in. I looked at other things I bought in 2009, and they include preferred stocks with a base dividend of 7.5% which were selling at 50% discount. Those paid out a tremendous return as they bounced back. Of course, having seen so many investments cut in half, I had a slightly nauseous feeling with every purchase I made.

Who is buying???

It's possible that people buying now will look back in 25 years from now, when the B shares are 9000, and will say to themselves "well, it didn't matter much if I bought them at 480 or 510"

(510 would be an CAGR of 12.15%, 480 would be a CAGR of 12.4% over the 25 years)

It's possible that people buying now will look back in 25 years from now, when the B shares are 9000, and will say to themselves "well, it didn't matter much if I bought them at 480 or 510"
(510 would be an CAGR of 12.15%, 480 would be a CAGR of 12.4% over the 25 years)

It's also possible that someone buying today will see something pretty typical: inflation+7%/year value growth and reversion to the mean of valuation levels in the next five years, giving them inflation+3.1%/year. The ending price will almost certainly be a lot higher than today's price even after inflation, but that doesn't by itself mean it's a great investment alternative.

As an intellectual exercise, compare with: "TIPS till the market has dropped a whole lot, then buy something good that is really oversold".
Even if there is no big drop within the next five years and you hold TIPS the whole time, that strategy would still get you inflation+1.4%/year, only 1.7%/year less. At the other extreme, it might double your money without any particular risk.

Jim

There are no long stretches of flat or poor results for purchase at valuation levels that are average or below.

Where, roughly, would one look for an "average or below" entry point for equal weight indexes like RSP or QQEW?

Baltassar

Where, roughly, would one look for an "average or below" entry point for equal weight indexes like RSP or QQEW?

One of the joys of Berkshire is that its valuation range has historically been pretty narrow and predictable : ) S&P 500 companies, less so.
So one can comment on RSP's valuation level relative to history, but it doesn't really tell you much because nobody has much of an idea what the valuation level will be in the next decade.

But I have tried it with QQEW, which oddly seems to be more predictable, at least historically. The gyrations are wild, but they average to a predictable line.

I built a trend line of the average (actually median) real earnings over time, which has so far trended extremely well except for dips in recessions. Then I look at the long run average earnings yield expressed as that real trend-earnings level divided by the current real price, to come up with an "average" valuation level, and bravely call that fair value.

A while back I estimated that QQQE was maybe on the order of 10% more expensive than usual, May 28 last year, and that value had historically risen at around inflation + 8%/year (not counting the usual .5%/year dividends). https://www.shrewdm.com/MB?pid=778370362
The price return since then is pretty similar to the historically typical trend value gain, so the valuation level is probably in the same vicinity: a bit high but not painful.

I would do an accurate update for you, but it's quite a long calculation!

My comments from that post may still apply, comparing Berkshire and QQQE:
"A valuation that's richer than usual by 10-20% isn't nearly enough to say "you'd be a fool to deploy your capital now, you really oughta wait". Since both are safe and growing in value, likely the worst case for the long run is just a flat spot for a while, with uncertain timing. That being said, my gut feel is that within 12-18-24 months both of these will be available at valuation levels that are at least somewhat cheaper than average rather than more expensive than average. But it's not usually a good idea to base investment decisions based on the gut feel of some rando on the internet."

The main change since then is that Berkshire's price has risen a lot more than that of QQQE. So the relative attractiveness question may be hard to pin down one way or the other then and now, but it has apparently shifted somewhat in the direction of QQQE and away from Berkshire since then.

Jim

Jim had commented QQQE was reasonably priced in 6/22. I bought a little bit which has appreciated 50%. For fun, BRK is up 90% since that same month!

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