Post #14929 by mungofitch on the Berkshire Hathaway board

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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤

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I don't think recent valuation levels look very attractive.

But they are lower than they were, so there have been moments lately that writing low-strike cash-backed puts seemed like it could be a useful strategy for some.
e.g., for someone watching the rate they're getting on cash slowly falling, you can add another 4-5%/year to that and (maybe) get an entry that is a good valuation level.

For this purpose, counterintuitively it makes sense to go for slightly longer dated puts. Say January, not September. The extra premium reaches farther down into the discount zone, and that "farther down" entry price is more likely to be a low multiple further in the future than it is now.

Jim

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