No. of Recommendations: 4
I'd like to sell some Berkshire shares for $600 between now (2026) and EOY 2028.
I noticed when the share price is ~$500 (currently $490) the December 15 2028 $500 calls are ~$100. So, you're committing to sell shares on that date for $600. In the meantime, you collect $10,000 per contract, which would earn some interest between now and then.
Here's a back-of-the-napkin share price projection (thanks to Jim):
Berkshire 3Q 2025 book value was $323.62.
Project 3Q 2028 book value to be $396.45 based on 7% growth (323.62 x 1.07^3).
Apply a P/B of 1.43 to get a share price of $566.92 (396.45 x 1.43).
Apply an inflation rate of 2.75% to get a nominal price of $614.99 (566.92 x 1.0275^3).
So, when Berkshire releases 3Q 2028 results in November 2028, about a month before the calls expire, the share price might be $615. That's in the ballpark to selling December 15 2028 $500 calls for $100.
However, I probably won't sell these calls because it just feels too far out.
