Saturday, 31 October 2009

Don't bite the hand that feeds you

The following news release from Bloomberg highlights the wisdom in that old expression that one should never bite the hand that feeds you

Oct. 31 (Bloomberg) -- Warren Buffett’s Berkshire Hathaway Inc., the biggest shareholder in Coca-Cola Co. and Wells Fargo & Co., reduced its stake in credit-rating company Moody’s Corp. by 2.9 percent, the third cut in just over three months.

Berkshire sold 1.15 million shares and remains Moody’s biggest stockholder with 38.07 million, according to a regulatory filing yesterday. The stake sold for about $28.7 million, Berkshire said. The Omaha, Nebraska-based firm cut its Moody’s holding by 17 percent in July and 2 percent last month.

Moody’s, whose founder John Moody created credit ratings in 1909, is suffering from reduced demand for debt analysis after the economic decline curbed fixed-income issuance. The firm and rival Standard & Poor’s have been criticized by regulators and lawmakers for not foreseeing the wave in homeowner defaults that brought down the value of securities once awarded gold-standard AAA credit grades.

Moody’s fell 59 cents, or 2.4 percent, to $23.68 yesterday in New York Stock Exchange composite trading. It has slipped 20 percent in the past six months, trailing the 19 percent gain in the S&P 500 Index. Berkshire declined $1,180 to $99,000 and has gained 5.3 percent in six months.

Buffett didn’t respond to a request for comment e-mailed to his assistant, Carrie Kizer, after normal business hours.

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