A short Jan 2027 490 put with a $30 premium is a commitment to buy BRKB at effectively $460, in 16 months.

In 16 months, 1.3 x book value will likely be about $460, and BRK will be buying their own shares if
it's at that price. $490 will likely be about 1.4 times book value in Jan 2027.

So instead of buying 100 shares of BRKB at $490 today (for $49,000) , I get paid $3000 + 16 months interest
on $49,000 (about another $2400) to wait for 1.3 x book before buying. That's 11% in 16 months, or
a little better than 8% per year, to wait for BRKB price to come down before buying.

If BRK price stays flat for the next 16 months, which I think is likely given the current
valuation, at least I get the put premium plus the interest.

Selling puts on BRKB is like insuring the house next to the fire station.

If I had a better idea of where to invest $49,000 now, I would do it.

Anyway, that's my thinking. I already have plenty of stock exposure, and am not
thrilled about buying more BRKB at $490 now.

Cheers,

Stopped Clock

Berkshire Hathaway FAQ

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