No. of Recommendations: 1
Another possible perspective: Taking a short position on BRK, thanks to it moving quite reliably in a well defined Price/BV range and it therefore being more predictable, can be less risky than taking a short position on another stock, because of a very high probability that it's Price/BV after breaking out North from that range will return into it by it's price falling.
That applies only if you are not a day trader, as it might take a little time (days/weeks/months) for that "Normalisation" of Price/BV to happen.
Indeed. Agreed. It's just that it takes SO LONG to play out.
That was my reasoning in January when I closed out my Jan'26 DITM call for a 16% gain, when the P/B got to over 1.55. With BRK-B at 383.19. Who would have guessed that it would continue upward to 485 and P/B 1.75?
Here is when I re-read my quotes file for consolation:
"You can’t judge the correctness of a decision from the outcome. But good decisions fail to work all the time – just as bad ones lead to success – simply because it’s so hard to predict which alternate history will materialize.
"The correctness of a decision can't be judged from the outcome. A good decision is one that's optimal at the time it's made, when the future is by definition unknown. Thus correct decisions are often unsuccessful, and vice versa." -- Howard Marks of Oaktree Capital
