Buffet knows we are in a secular bear market that is eight years old. In Oct 07 the first of a cyclical bull market with this secular bear peaked out near 1500 on the SP. Now secular bears, like secular bulls, run 18 to 20 years, so in 2018 a new secular bull will be running and the $4.5B of SP puts will expire worthless. Buffet is writing puts when the premiums are fat. He put part of that premium in either GS or GE at 10% for a cool $500 million year dividend for BRK shareholders.
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Buffet knows we are in a secular bear market that is eight years old. In Oct 07 the first of a cyclical bull market with this secular bear peaked out near 1500 on the SP. Now secular bears, like secular bulls, run 18 to 20 years, so in 2018 a new secular bull will be running and the $4.5B of SP puts will expire worthless. Buffet is writing puts when the premiums are fat. He put part of that premium in either GS or GE at 10% for a cool $500 million year dividend for BRK shareholders.
Nov 13 20:51 pm
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