Buffet trims stake in Moody's
23 December 2009
Warren Buffett's Berkshire Hathaway Inc trimmed its stake in Moody's Corp for the sixth time since July. Berkshire divested 87,992 shares on 18 Dec at $26.77 a share and remains the rating company's largest shareholder, according to a regulatory filing yesterday.
The Omaha, Nebraska-based company now holds a stake of about 34 per cent in the rating agency. The company held 48 million shares at the end of June.
Buffett buys stocks that have lasting competitive advantages and superior management. His stake in the rating firm, which was founded by John Moody a century ago, goes back to 2000 and at its peak, his stake had a value in excess of $3.5 billion in 2007.
The company has since dropped more than half amid criticism of inflated credit ratings fueling the housing boom and worsening the recession.
According to analysts Moody's reputation had certainly suffered and they say Buffet may think the stock is worth less now.
Buffett built Berkshire into a $150-billion company picking up stock in out-of-favor companies. Buffet's ideal time horizon for holding shares he says is ''forever.'' Berkshire is the biggest shareholder in Coca-Cola Co and American Express Co having held the stocks for more than two decades even after they were trading below their top prices in the 1990s.