Post #11208 by mungofitch on the Berkshire Hathaway board

Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤

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I have switched to selling BRK puts and letting my pile of cash earn 4-5% interest. With the additional put premiums I have so far been earning in excess of 10-12% annualized (keeping up with BV growth) while i wait for valuations to come back in line.

This has been a pretty good strategy in the recent stretch of reasonably high BRK valuations and reasonably high interest on cash. I mentioned it here https://www.shrewdm.com/MB?pid=711586943
I have done this too, but I haven't had them very much of the time--I probably should have done more.

The ones I did were almost all from mid June to end August. I closed them all fairly quickly because it was such a strong rally: if you've made more than half the maximum possible profit in 10-20% of the time, there is no need to hang around. I made an average of $8.29 a share not counting the interest on the cash. That works out to some absurd CAGR, though the dollar total was modest as I didn't do enough.

Jim

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