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The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", BreckHutHigh asked the members: "What about the long road trips with kids?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Investment Strategies / Falling Knives
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Author: mungofitch 🐝🐝🐝 GOLD
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Number: of 1166 
Subject: FKA: GOOGL
Date: 08/05/24 4:16 PM
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No. of Recommendations: 15
I don't think Alphabet is cheap at today's price of $160.

But, I think it has fallen enough that it isn't overvalued, if you believe in the business model for a while yet as I do. I could live with this entry, though of course I'd like to do better.

I wrote a few puts today, which were unusually remunerative given the slight panic in the market. If they're assigned, I figure I'll just keep the stock. I have a core long term position that makes me happy, but it isn't as big as I wish. I think the net entry price on this new position (strike minus premium) may get me a double digit return in the next coupla/few years. It works out to almost exactly 17 times consensus earnings for next year, which I think is pretty good for this firm. Numbers like 25 seem to be more common.

If they aren't assigned, it's a 22.1%/year rate of return on the incremental cash committed, in addition to the 4.9%/year I'm already earning on that same cash, total 27%/year rate till around year end.

As a bonus, since I don't know which outcome I'll get, there is an extra entertainment value to the position.

Jim
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