2024 Q4 and Annual Report

[CassiusKing1]

On 2/22/2025 at 9:02 AM, backtothebeach said:

Q4 2024   BV per B

301.00

Cash and equivalents

321,432

(payable for treasuries deducted)

 

Operating Earnings

14,527

(insurance killing it)

 

no buybacks

 

No afternoon session at the Annual Meeting, instead a longer morning session with a break.

Currently at $510 a share, approximately 1.69 book.  I've sold some already, thinking about selling more and waiting for an opportunity to get back in cheaper.

[Spooky]

26 minutes ago, CassiusKing1 said:

Currently at $510 a share, approximately 1.69 book.  I've sold some already, thinking about selling more and waiting for an opportunity to get back in cheaper.

 

Why not just hang on for the ride? Save the taxes / transaction fees.

[Martian]

20 hours ago, boilermaker75 said:

@Martian I shouldn't perpetuate this but how is "But selling puts come with it’s own risks as the stock might crater and you are left holding the bag" any different than buying the stock? Other than you are a little better off writing the put because you have the put premium.

Writing puts to get into a position for buy and hold is not a problem. So when that stock goes down, it  will be the same as if you had bought it outright.

 

But when it’s part of the “wheel”, you can not write covered calls anymore as your assigned price will be far below the current stock price. If you want to write a CC above your assigned price, the premium will be very low even if you go months out. Then it becomes an involuntary long term position unless you want to sell and take the loss.

[RiskAdjReturn]

1 hour ago, Martian said:

Writing puts to get into a position for buy and hold is not a problem. So when that stock goes down, it  will be the same as if you had bought it outright.

 

But when it’s part of the “wheel”, you can not write covered calls anymore as your assigned price will be far below the current stock price. If you want to write a CC above your assigned price, the premium will be very low even if you go months out. Then it becomes an involuntary long term position unless you want to sell and take the loss.

imho brkb runup is crazy retail/media hype over "cash" by people who don't understand (1) you are buying that cash at 1.65x (im modeling accrued book at 3/31), (2) buffet still long 300B in equities, (3) alot of the "earnings" people are fawning over include all the spread/yield from S-T cash,etc...rolling that into equities comes at a cost Warrent won't easily take imho, (4) warren isn't gonna go nuts buying stocks in a downturn, and why pay 1.65x cash balance when i can buy equities on downturn on my own.

 

love the equity/company, just feels like its run too far.

[73 Reds]

11 minutes ago, RiskAdjReturn said:

imho brkb runup is crazy retail/media hype over "cash" by people who don't understand (1) you are buying that cash at 1.65x (im modeling accrued book at 3/31), (2) buffet still long 300B in equities, (3) alot of the "earnings" people are fawning over include all the spread/yield from S-T cash,etc...rolling that into equities comes at a cost Warrent won't easily take imho, (4) warren isn't gonna go nuts buying stocks in a downturn, and why pay 1.65x cash balance when i can buy equities on downturn on my own.

 

love the equity/company, just feels like its run too far.

You may be right but the value of cash depends on who is holding it.

[Munger_Disciple]

3 hours ago, RiskAdjReturn said:

imho brkb runup is crazy retail/media hype over "cash" by people who don't understand (1) you are buying that cash at 1.65x (im modeling accrued book at 3/31), (2) buffet still long 300B in equities, (3) alot of the "earnings" people are fawning over include all the spread/yield from S-T cash,etc...rolling that into equities comes at a cost Warrent won't easily take imho, (4) warren isn't gonna go nuts buying stocks in a downturn, and why pay 1.65x cash balance when i can buy equities on downturn on my own.

 

love the equity/company, just feels like its run too far.

 

Honorable mention (& thanks) should also go the covered call boys for the ripping of BRK 

[boilermaker75]

4 hours ago, Martian said:

Writing puts to get into a position for buy and hold is not a problem. So when that stock goes down, it  will be the same as if you had bought it outright.

 

But when it’s part of the “wheel”, you can not write covered calls anymore as your assigned price will be far below the current stock price. If you want to write a CC above your assigned price, the premium will be very low even if you go months out. Then it becomes an involuntary long term position unless you want to sell and take the loss.

 

You only do this on companies you are willing to own. It is like writing insurance. You collect the premiums and then when there is a claim what you pay out gets you a company you are willing to own. It is no different than deciding I want to buy 100 shares of BRKB outright or doing this by writing a put and getting put to at a little better price. 

 

You changed the narrative to a "wheel"??? Whether you buy the stock, or get it by being put to, you are in the same position if it craters. Is it not?

Edited Friday at 08:50 PM by boilermaker75

[thepupil]

4 hours ago, RiskAdjReturn said:

imho brkb runup is crazy retail/media hype over "cash" by people who don't understand (1) you are buying that cash at 1.65x (im modeling accrued book at 3/31), (2) buffet still long 300B in equities, (3) alot of the "earnings" people are fawning over include all the spread/yield from S-T cash,etc...rolling that into equities comes at a cost Warrent won't easily take imho, (4) warren isn't gonna go nuts buying stocks in a downturn, and why pay 1.65x cash balance when i can buy equities on downturn on my own.

 

love the equity/company, just feels like its run too far.

 

 

normally I explain ST BRK/B moves w/ XLF, but this runup after earnings is above and beyond XLFs performance. your explanations seem plausible.

 

 

Edited Friday at 09:36 PM by thepupil

[Martian]

17 hours ago, boilermaker75 said:

 

You only do this on companies you are willing to own. It is like writing insurance. You collect the premiums and then when there is a claim what you pay out gets you a company you are willing to own. It is no different than deciding I want to buy 100 shares of BRKB outright or doing this by writing a put and getting put to at a little better price. 

 

You changed the narrative to a "wheel"??? Whether you buy the stock, or get it by being put to, you are in the same position if it craters. Is it not?

I mentioned wheel in the original comment just to say that there are some strategies (like WEEL ETF) that capture the premium in both directions (selling CSPs and CCs) and if the stock tanks that cycle will be broken.

 

Your strategy of selling puts to get into a long term position is different from that. Even though selling puts is common in both, they are two different strategies with different goals.

 

[sleepydragon]

@boilermaker75 when you write puts, do you just write short term slightly OTM ones?

 

I am looking at a stock (not brk), and thinking  to sell a one year 10-15% OTM put. It seems if one is bullish in a stock, it’s more likely the put will be worthless if expiration date is further out.. (though i admit i may end up never own the stock selling long term puts).

[73 Reds]

41 minutes ago, Martian said:

I mentioned wheel in the original comment just to say that there are some strategies (like WEEL ETF) that capture the premium in both directions (selling CSPs and CCs) and if the stock tanks that cycle will be broken.

 

Your strategy of selling puts to get into a long term position is different from that. Even though selling puts is common in both, they are two different strategies with different goals.

 

When it comes to options, I don't think any "strategy" is terribly effective.  Rather, options may be used to take advantage of specific situations, i.e., one-time mispricing, high volatility, desire to enter or exit an equity position, etc...

[sleepydragon]

I am reading how selling options is taxed. So when selling puts, if the puts expire worthless, you are taxed at short term capital gain rate. But if the puts is exercised, the tax on the premium you received is effectively deferred and is later determined by how long you hold the stocks that were put to you. So that’s advantageous than buying stocks directly. Maybe i shall be doing this from now  when buying stocks.

 

[cubsfan]

18 hours ago, Munger_Disciple said:

 

Honorable mention (& thanks) should also go the covered call boys for the ripping of BRK 

 

Now that's funny.

[backtothebeach]

28 minutes ago, sleepydragon said:

@boilermaker75 when you write puts, do you just write short term slightly OTM ones?

 

I am looking at a stock (not brk), and thinking  to sell a one year 10-15% OTM put. It seems if one is bullish in a stock, it’s more likely the put will be worthless if expiration date is further out.. (though i admit i may end up never own the stock selling long term puts).

If you are bullish on a stock, just buy the damn stock. I’m pretty sure that’s what Charlie Munger would say.

[73 Reds]

14 minutes ago, sleepydragon said:

I am reading how selling options is taxed. So when selling puts, if the puts expire worthless, you are taxed at short term capital gain rate. But if the puts is exercised, the tax on the premium you received is effectively deferred and is later determined by how long you hold the stocks that were put to you. So that’s advantageous than buying stocks directly. Maybe i shall be doing this from now  when buying stocks.

 

Yeah, selling options is best done in a retirement (deferred or nontaxable) account.  I rarely buy options (buying great stocks is hard enough, timing the buys is that much harder) but one combination sometimes works - buying a LEAPs option and selling short-dated "covered" call options against your LEAPs position.  This can work particularly well with high priced stocks

[Hektor]

22 hours ago, 73 Reds said:

the value of cash depends on who is holding it

[sleepydragon]

On 2/26/2025 at 10:39 PM, gfp said:

https://www.gurufocus.com/news/39652/warren-buffett-again-sells-puts-on-burlington-northern-santa-fe-berkshire-hathaway-filing-reveals

This puts he sold are 2 month to expiration ATM , with premium of 8%. That’s so good! The stocks i am looking at only has put premium of 1-3% two months out. 

[boilermaker75]

4 hours ago, sleepydragon said:

@boilermaker75 when you write puts, do you just write short term slightly OTM ones?

 

I am looking at a stock (not brk), and thinking  to sell a one year 10-15% OTM put. It seems if one is bullish in a stock, it’s more likely the put will be worthless if expiration date is further out.. (though i admit i may end up never own the stock selling long term puts).

 

@sleepydragon  I rarely write a put that is more than a month out. 70% are two weeks or less. I often write them the week they expire. There is a lot pf time premium that evaporates quickly, which I collect. Also if I am using the puts to purchase the stock I am hoping it happens soon, before the stock goes up. That is the only downside I experience, the stock goes up so I only collect the put premium and not the appreciation in the stock. But for acquiring a stock, the only time I didn't get the position I wanted was with MCD when I was trying to get it around $95. MCD went up to about $125 and so I didn't purchase it . Mistake. My brother has had MCD for a long time (~40 years) and I think he said each dividend is more than the original cost of his MCD.

[boilermaker75]

4 hours ago, sleepydragon said:

I am reading how selling options is taxed. So when selling puts, if the puts expire worthless, you are taxed at short term capital gain rate. But if the puts is exercised, the tax on the premium you received is effectively deferred and is later determined by how long you hold the stocks that were put to you. So that’s advantageous than buying stocks directly. Maybe i shall be doing this from now  when buying stocks.

 

 

Exactly

[boilermaker75]

4 hours ago, backtothebeach said:

If you are bullish on a stock, just buy the damn stock. I’m pretty sure that’s what Charlie Munger would say.

 

You only use market orders?

[sleepydragon]

31 minutes ago, boilermaker75 said:

 

@sleepydragon  I rarely write a put that is more than a month out. 70% are two weeks or less. I often write them the week they expire. There is a lot pf time premium that evaporates quickly, which I collect. Also if I am using the puts to purchase the stock I am hoping it happens soon, before the stock goes up. That is the only downside I experience, the stock goes up so I only collect the put premium and not the appreciation in the stock. But for acquiring a stock, the only time I didn't get the position I wanted was with MCD when I was trying to get it around $95. MCD went up to about $125 and so I didn't purchase it . Mistake. My brother has had MCD for a long time (~40 years) and I think he said each dividend is more than the original cost of his MCD.

thanks boilermaker.

 

[Munger_Disciple]

7 hours ago, cubsfan said:

 

Now that's funny.

 

[backtothebeach]

5 hours ago, boilermaker75 said:

You only use market orders?

No. I was just channeling my inner Charlie Munger.

[DooDiligence]

17 hours ago, boilermaker75 said:

 

You only use market orders?

 

That's a very nice way of putting it.

Clear as an opening bell.

 

I keep having to edit because I forget the emoji: 

Edited Sunday at 01:48 PM by DooDiligence

[boilermaker75]

13 hours ago, backtothebeach said:

No. I was just channeling my inner Charlie Munger.