Nearly everyone in the market pays some attention to Berkshire Hathaway's (NYSE:BRK.A) multi-billionaire chief Warren Buffett. However, Mr. Buffett is often quite cryptic about exactly what he is looking to do in terms of investments. Consequently, investors, financial journalists and commentators cannot wait to pore over the snippets of information that do come out in filings to the SEC, interviews and his annual letter to shareholders. (This esteemed investor rarely changes his long-term investing strategy, no matter what the market does. Check out Warren Buffett's Bear Market Maneuvers.)
Given all those information sources, it looks like Mr. Buffett may have hit the "pause" button when it comes to buying stocks. His most recent letter really did not mention stocks to the same degree as in the past, and the most recent filings indicated that he sold eight stocks in the fourth quarter of 2010 while taking no new positions. Why might Mr. Buffett be staying away from stocks right now?
Go Big or Go Home
Warren Buffett has the same problem as many large fund managers - the larger the assets under management get, the harder it is to find meaningful new opportunities. What's more, Mr. Buffett is famous for a KISS-type methodology (Keep It Simple, Stupid) that argues against holding dozens and dozens of positions.
To read the full piece, please go to:
http://financialedge.investopedia.com/financial-edge/0311/Why-Warren-Buffett-Might-Not-Be-Buying-Stocks.aspx
Showing posts with label Moodys. Show all posts
Showing posts with label Moodys. Show all posts
Tuesday, March 22, 2011
Tuesday, November 2, 2010
FinancialEdge: 5 Big Names That Profited From The Recession
Economics is fortunately almost never a zero-sum game; there can be multiple winners and even in the worst of times there can be players who manage to benefit and grow. Such is the case for this latest recession. While Lehman Brothers, Bear Stearns and hundreds of small banks have disappeared from the landscape (at least as independent entities), others have seen their business or prospects actually improve. (This company survived many financial crises in its long history. Find out what finally drove it to bankruptcy. Check out Case Study: The Collapse of Lehman Brothers.)
Here is a short list of some the most notable beneficiaries of this recent recession.
The Oracles
Although there were arguably many voices talking about the housing bubble and the large systematic risks that it was creating, two names really rose out of the noise. NYU economics professor Nouriel Roubini has appeared prophetic with his predictions of how the collapsing housing market would ripple through the economy. Likewise, Nassim Taleb, author of the The Black Swan, has seen his work jump into the spotlight with broad acclaim for its discussions of the flaws inherent in risk assessment and prediction.
To read the full piece, please click on the link:
http://financialedge.investopedia.com/financial-edge/1110/5-Big-Names-That-Profited-From-The-Recession.aspx
Here is a short list of some the most notable beneficiaries of this recent recession.
The Oracles
Although there were arguably many voices talking about the housing bubble and the large systematic risks that it was creating, two names really rose out of the noise. NYU economics professor Nouriel Roubini has appeared prophetic with his predictions of how the collapsing housing market would ripple through the economy. Likewise, Nassim Taleb, author of the The Black Swan, has seen his work jump into the spotlight with broad acclaim for its discussions of the flaws inherent in risk assessment and prediction.
To read the full piece, please click on the link:
http://financialedge.investopedia.com/financial-edge/1110/5-Big-Names-That-Profited-From-The-Recession.aspx
Tuesday, July 13, 2010
A Chinese Competitor In Bond Ratings?
In my morning news sweep, I came across an interesting little tidbit about a Chinese bond rating firm. The company is Dagong Global Credit Rating, and according to its website, it is the founder of the native Chinese bond rating industry. With 500 employees, it would be tiny compared to Moody's (NYSE: MCO), McGraw-Hill's (NYSE: MHP) Standard and Poors, and Fitch, but then it does not have nearly the same breadth of operations at this point.
What brought this to my attention was a piece on Al-Jazeera's English language website regarding Dagong's view of sovereign credit. In Dagong's world, the AAA countries of the world are Norway, Australia, Denmark, Luxembourg, Switzerland, Singapore, and New Zealand. China and Germany score as "AA+", with the U.S. and Saudi Arabia just behind at "AA". Interestingly, Spain, South Africa, Estonia, Russia, Poland, Italy, Portugal, and Brazil all pull the same "A-" rating. Mexico and India get a "BBB", while Greece, Turkey, and Iceland share a "BB", Vietnam gets a "BB-" and Ecuador is the bottom at CCC.
A lot of things stand out here.
First, Dagong gives just 6 local currency AAA ratings; Moodys gives 14 and S&P and Fitch give 13. Second, Dagong is more positive on China, Saudi Arabia, Russia, Brazil, and India, but more negative on Canada, the US, UK, and France.Now, I happen to think that Mexico, Turkey, Poland, and Vietnam are under-rated, but Dagong is consistent with the other agencies on those, so I do not have a particular bone to pick with them.
I really cannot speak to how independent Dagong may be (is it a coincidence that Dagong likes Saudi Arabia and China very much wants to be on solid terms with the Kingdom?), as I did not even know about them five hours ago. Still, I am impressed at first blush with the logic and assumptions that underlie the work (at least as described in the report). What's more, I really think the bond rating world needs fresh blood and new opinions, so any credible analysis that shakes up the status quo is a welcome arrival for this writer.
I doubt individual investors will be able to harness this research for their own purposes, but I am glad to hear that new voices are speaking out. We have seen the limitations of Moody's, S&P, and Fitch amply demonstrated over the past few years, so maybe a new way of approaching the problem is what we all need.
What brought this to my attention was a piece on Al-Jazeera's English language website regarding Dagong's view of sovereign credit. In Dagong's world, the AAA countries of the world are Norway, Australia, Denmark, Luxembourg, Switzerland, Singapore, and New Zealand. China and Germany score as "AA+", with the U.S. and Saudi Arabia just behind at "AA". Interestingly, Spain, South Africa, Estonia, Russia, Poland, Italy, Portugal, and Brazil all pull the same "A-" rating. Mexico and India get a "BBB", while Greece, Turkey, and Iceland share a "BB", Vietnam gets a "BB-" and Ecuador is the bottom at CCC.
A lot of things stand out here.
First, Dagong gives just 6 local currency AAA ratings; Moodys gives 14 and S&P and Fitch give 13. Second, Dagong is more positive on China, Saudi Arabia, Russia, Brazil, and India, but more negative on Canada, the US, UK, and France.Now, I happen to think that Mexico, Turkey, Poland, and Vietnam are under-rated, but Dagong is consistent with the other agencies on those, so I do not have a particular bone to pick with them.
I really cannot speak to how independent Dagong may be (is it a coincidence that Dagong likes Saudi Arabia and China very much wants to be on solid terms with the Kingdom?), as I did not even know about them five hours ago. Still, I am impressed at first blush with the logic and assumptions that underlie the work (at least as described in the report). What's more, I really think the bond rating world needs fresh blood and new opinions, so any credible analysis that shakes up the status quo is a welcome arrival for this writer.
I doubt individual investors will be able to harness this research for their own purposes, but I am glad to hear that new voices are speaking out. We have seen the limitations of Moody's, S&P, and Fitch amply demonstrated over the past few years, so maybe a new way of approaching the problem is what we all need.
Wednesday, June 23, 2010
Muni-phobia
Wish I would have had more space to deal a bit with the bond insurers who also stand to be on the hook if/when these munis start melting down... Who knows, maybe that's another article all on its own!
The ticking clock is a great device for creating dramatic tension on screen. You might get up to go get a snack when the lead actors are emoting, but nobody leaves when there is three seconds left on the device that is going to explode. Maybe that is why there is so much fuss in the financial media about the impending detonation of the municipal bond market.
Safe and Sleepy... UsuallyIn normal days, municipal bonds are arguably one of the sleepiest and most boring segments of the financial marketplace. Munis are bonds issued by communities or enterprises to pay for things like roads, hospitals and schools. So dull are they that there is typically no active quotation system for them - they trade seldom enough that you have to call your broker, who will then call around to get bid/ask quotes on the bond. (For a quick refresher, check out The Basics Of Municipal Bonds.)
Now, though, that may be changing.
For the complete column:
http://stocks.investopedia.
The ticking clock is a great device for creating dramatic tension on screen. You might get up to go get a snack when the lead actors are emoting, but nobody leaves when there is three seconds left on the device that is going to explode. Maybe that is why there is so much fuss in the financial media about the impending detonation of the municipal bond market.
Safe and Sleepy... UsuallyIn normal days, municipal bonds are arguably one of the sleepiest and most boring segments of the financial marketplace. Munis are bonds issued by communities or enterprises to pay for things like roads, hospitals and schools. So dull are they that there is typically no active quotation system for them - they trade seldom enough that you have to call your broker, who will then call around to get bid/ask quotes on the bond. (For a quick refresher, check out The Basics Of Municipal Bonds.)
Now, though, that may be changing.
For the complete column:
http://stocks.investopedia.
Tuesday, June 8, 2010
Taking (Apart) Buffett At His Words
If I keep this up I'm not going to be allowed back home (Omaha).
By the way, there was a small misprint in the first sentence of the last paragraph. We'll be getting that fixed soon.
On Wednesday, June 2, 2010, Berkshire Hathaway's (NYSE:BRK.A) CEO and chairman Warren Buffett, testified live in front of Congress's Financial Crisis Inquiry Commission. As much as I admire and respect him, I stubbed my eye more than once while reading the reports of his testimony. Here are some of the statements that really stood out. (Find out what makes the Oracle of Omaha so great in Warren Buffett: The Road To Riches.)
Why No Written Record?Warren Buffett elected not to provide any written testimony. Perhaps that is no big deal (he might have just been speaking extemporaneously), but it is notable for at least one reason - he was the only person to speak in front of the Commission that day to not offer written testimony.
For the full text, please go to:
http://financialedge.investopedia.com/financial-edge/0610/Taking-Apart-Buffett-At-His-Words.aspx
By the way, there was a small misprint in the first sentence of the last paragraph. We'll be getting that fixed soon.
On Wednesday, June 2, 2010, Berkshire Hathaway's (NYSE:BRK.A) CEO and chairman Warren Buffett, testified live in front of Congress's Financial Crisis Inquiry Commission. As much as I admire and respect him, I stubbed my eye more than once while reading the reports of his testimony. Here are some of the statements that really stood out. (Find out what makes the Oracle of Omaha so great in Warren Buffett: The Road To Riches.)
Why No Written Record?Warren Buffett elected not to provide any written testimony. Perhaps that is no big deal (he might have just been speaking extemporaneously), but it is notable for at least one reason - he was the only person to speak in front of the Commission that day to not offer written testimony.
For the full text, please go to:
http://financialedge.investopedia.com/financial-edge/0610/Taking-Apart-Buffett-At-His-Words.aspx
Thursday, June 3, 2010
Buffett's Take On The Credit Crisis
I think I have reached the point now where nothing tied to the housing bubble, the credit crisis and the recession surprise me anymore. The capper was the testimony of Berkshire Hathaway's (NYSE:BRK.A) CEO Warren Buffett in front of Congress on Wednesday.
The Testimony
In his testimony, Buffett said that he did not believe that the CEOs of the credit ratings agencies deserve to be fired, and that the companies should not be criticized too harshly because they "made a mistake that virtually everybody in the country made."
Please read the full column at:
http://stocks.investopedia.
The Testimony
In his testimony, Buffett said that he did not believe that the CEOs of the credit ratings agencies deserve to be fired, and that the companies should not be criticized too harshly because they "made a mistake that virtually everybody in the country made."
Please read the full column at:
http://stocks.investopedia.
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