No. of Recommendations: 5
Long time ago Jim mentioned:
My best approach (and my main personal investing approach) goes like this:
Check the most recently published quarterly book per share.
When the P/B ratio drops below 1.35 sell some BRK stock and use the proceeds to buy long dated deep in the money BRK call options.
...
Then, next time the stock trades above 1.55 times known book per share, take the profits on the calls and use all the proceeds to buy plain stock again, ditching the leverage.
So, you're invested all the time, but pile on a little leverage when the outlook is particularly good.
It's much like your switch, but instead of switching between BRK and something else, you're switching between BRK and more BRK.
Just now in my skimming is this:
Fri Jan 26 05:13:29 PM CST 2024
From ycharts: P/B 1.599 for Jan. 26, 2024
From alphaquery: P/B 1.55
From macrotrends: P/B 1.57 January 25, 2024
So this would indicate that we should sell any DITM calls, right?
The most recent under 1.35 was:
From ycharts: P/B 1.349 for Oct. 27, 2023
BRK-B opened 10/30/23 at 332.96,
closed 1/26/24 at 385.40.
Up 15.7%
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Maybe in ditching the DITM calls for stock, maybe also sell covered calls?
