Subject: Re: On Topic (really :): A Berkshire Hathaway question
- Buy calls when Price/PeakBV falls to 1.2 in Jim's table
- Sell at 1.4...

Though there are many such schemes possible, I think the main lesson is just that it makes sense to hold more when it's cheap and less when it's expensive.
When it's cheap you know that the near future (time frame unknown, but rarely more than a year or two) will offer you a one time return in excess of the long term trend rate of value growth.
When it's expensive, you know that the near future (time frame even more unknown) will contain a flat spot during which you will NOT get the long run trend rate of return.

So, what to do?
A backtest won't tell you the likelihood of seeing any given level of cheapness again in future.
But, if it does happen...react to it.
You'll know it when you see it.

Jim