Buffett Further Trims Moody’s Stake as Shares Surge 21%; “What was once a bulletproof franchise may not be bulletproof”

May 2, 2013 Leave a comment

Buffett Further Trims Moody’s Stake as Shares Surge 21%

Berkshire Hathaway Inc. (BRK/A), led by billionaire Chairman Warren Buffett, further trimmed its holdings of Moody’s Corp. (MCO) as the credit-ratings firm’s stock has surged this year. Berkshire sold about 1.75 million shares this week at prices ranging from $59.93 to $60.94 apiece, according to a filing issued yesterday. New York-based Moody’s has advanced 21 percent in 2013. Moody’s plunged in February when its larger competitor, Standard & Poor’s, said it could face a U.S. lawsuit over inflated mortgage-bond ratings. Buffett, 82, has pared his stake from 48 million shares in 2009. Buffett has said Moody’s didn’t anticipate a slide in housing prices.

“What was once a bulletproof franchise may not be bulletproof,” the billionaire said in a 2010 Bloomberg Television interview. “It’s still quite a franchise.”Buffett’s firm held 26.7 million Moody’s shares after this week’s transactions, the filing shows. Berkshire, based in Omaha, Nebraska, is still the largest shareholder in Moody’s, the second-biggest provider of credit ratings.

Moody’s declined 5 cents yesterday in New York to $60.80. It advanced 14 percent in April and 11 percent in March after sliding 12 percent in February. Berkshire Class A shares gained 0.4 percent to $159,699.

Buffett didn’t immediately respond to an e-mailed request for comment sent to an assistant.

To contact the reporter on this story: Dan Reichl in San Francisco at dreichl@bloomberg.net

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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