If anyone is interested I can repost here if I can find it through DataHelper.

It's a slow day at work and I was able to find the old posts in DataHelper. I found it valuable to reflect on my own actions so I'm reposting here with a current update at the end. I think I will try to keep updating periodically even if it is only for my own benefit :)

For anyone interested in the full discussion thread I think you'll be able to get to it through this link to one of the posts in DataHelper.

http://www.datahelper.com/mi/search.phtml?nofool=y...

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Author: bluehorseshoe2 Date: 04/16/2021 06:25 PM Msg: MI-280987
: Re: brkb plus mechancial Recs: 4
I really learned a lot from this thread a few years ago and because historical options pricing is nearly impossible to find I thought it might be helpful to some to see an update of my transactions.

I did not own any BRK.b in this account prior to this trade.

01/16/2014: Buy Jan16 80s for $39.60 P/B 1.36x
12/14/2015: Sell Jan16 80s for $51.65 P/B 1.31x

Seemed like a good time to roll
12/14/2015: Buy Jan18 90s for $49.00 P/B 1.31x
12/01/2017: Sell Jan18 90s for $104.72 P/B 1.56x

It didn't seem like a great time to roll so I bought shares instead on 12/01/2017 for $193.67.

05/03/2018: Sold some shares for $190.13.
05/03/2108: Buy Jan20 120s for $79.25 P/B 1.36x (half my original leap position)

I bought too early once again but it was the first quarterly drop in book since 2011 and I believed it was temporary.

10/26/2018: Buy Jan21 130s for $82.00 P/B 1.37x (other half of my original leap position)

On 10/26/2018 I owned the following contracts:
Jan20 120s for $79.25
Jan21 130s for $82.00

9/30/2019: Sell Jan20 120s for $89.10

My estimate of Q3 ending book value had P/B at 1.33x so I took the opportunity to capture the bit of remaining premium and roll up and out.

9/30/2019: Buy Jan22 130s for $89.50

Before we look at the next transactions, let's just remember BRK.b dropped to $159.50 on 3/23/2020. I have to say I appreciate the advantage of un-callable leverage way more now.

1/12/2021: Sell Jan21 130s for $103.15

Jim might say to exercise that close to expiration but this is a retirement account and I'm limited in what trades I can do. With expected P/B at 1.22x at the time I chose to just roll up and out.

1/12/2021: Buy Jan23 150s for $92.90

As the share price has increased this year I decided today that it was a good time to pull back a little on my leverage with P/B being at its highest level since May of 2019. My personal estimate of IV is around $280 per B share and BRK has rarely traded this close to my estimate of IV.

4/16/2021: Sell Jan22 130s for $142.85
4/16/2021: Buy shares at $272.00 (56 shares for every contract sold because I had a bit of cash in the account)

So now I control a few less shares but I'll be waiting for another time when the forward returns with leverage look appealing to me. I still have my Jan23 150s for now for a pinch of leverage should the run up continue.

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Activity after the post on 4/16/2021:

Well the run up did continue as BRK price and BV continued to rise as equity prices increased. I raised my estimates for BV and IV for Q2 and decided to sell half my shares and buy back half my leap position at about 1.32x P/B for Q2.

6/24/2021: Buy Jun23 200s for $87.50

The share price stayed flat even though BV and IV were increasing. I decided to sell my Jan23s and a few shares to increase my leverage by rolling up and out to the Jan24s and increased my contracts by 50% with P/B at about 1.32x for Q3

9/28/2021: Sell Jan23 150s for $130.00
9/28/2021: Buy Jan24 200s for $93.00

Now we get to the spring of 2022 and BRK is getting to multiples of P/B and IV that we had not seen in a long time. I decide it's time to reduce leverage.

3/9/2022: Sell Jun23 200s for 135.20
Buy shares at $326.04 with the proceeds

I also sell covered calls for the first time against my holdings. At the time I believed IV was forecasted to be about ~$350 for 2022 year end and BRK rarely if ever trades at my IV estimate.

3/9/2022: Sell Jan23 340s for $23.90
3/11/2022: Sell Jan23 340s for $24.65

The price of BRK continues to rise and I decide to reduce leverage further by selling 1/3 of the Jan24s I've only owned for 6 months.

3/17/2022: Sell Jan24 200s for $156.10
I did not buy any shares this time using the proceeds. With P/B at 1.51 I thought I would have a better opportunity.

The share price dropped quickly going into May so I decided to capture the the premiums from my covered calls. I moved much too early in hindsight.

5/2/2022: Buyback Jan23 340s for $14.45

I also buy a few shares as the price gets back under median P/B at the time.

5/9/2022: Buy shares for $314.55

Now the share price is falling quickly and soon we are trading at P/B below 1.3x. I never thought it would happen so quickly but I decide to start putting my leverage back on.

6/10/2022: Buy Jan24 200s for $113.50

As I've said before, I like to have expiration dates spread out for my leaps when possible so I take that opportunity here. Interest costs were higher than we had seen in a long time too so shorter duration looked more attractive.

6/14/2022: Buy Jun23 200s for $91.55

As the price of BRK started to rise in April this year I decided to capture the bit of remaining time premium on my Jun23 calls.

4/13/2023: Sell Jun23 200s for $118.25

And with P/B being at about median levels for what I expect Q1 BV to be I decided to roll up and out to Jan25. By far the most time premium I've paid but the most likely outcomes still look attractive to me.

4/13/2023: Buy Jan25 220s for $119.15.

In summary, I now have Jan24 200s and Jan25 220s for leverage and I own more shares than I have at any point in the past. I hope to hold onto my Jan24 calls until the Jan26 are available so I can continue to spread out the expiration dates, or maybe we will get lucky and BRK will return to higher multiples and I will reduce leverage again.

Jeff