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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: knighttof3   😊 😞
Number: of 15067 
Subject: Re: Check Capital Management BRK Options Stragegies
Date: 10/15/2023 8:40 AM
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Alpha = abnormal returns in excess of expected market returns (beta, short for beta * index returns).

Put call parity:
Bond + call = stock + put
i.e.
Bond - put = stock - call
Which is shorthand for, holding a risk free bond and selling a put on a stock has tge same risks and return as holding that stock and selling calls on it with the same terms as the put (strike price and date).

So no, a bond index alone is not at all a valid benchmark to judge Check Capital's performance. They used it to make themselves look better than their actual performance warrants.
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