Fitch Downgrades Berkshire 2 Notches!

[Parsad]

Fitch downgrades Berkshire to AA-.  A couple of things we've seen lately with Berkshire...derivatives bets, splitting the shares and now the loss of Berkshire's pristine AAA rating.  Things that are very un-Buffett-like based on what we've heard over the last decade.  Cheers!

 

http://www.reuters.com/article/idCNN1017630620100210?rpc=44

[Guest kawikaho]

What?!  Wow. 

[Ballinvarosig Investors]

Things that are very un-Buffett-like based on what we've heard over the last decade.

Unusual for the Buffett of the last decade, but not so unusual for the Buffett of the partnership days.

[Partner24]

Each time I see or hear the word "Fitch", the first thing that comes in my mind is "Who cares?". I never read their reports anymore.

 

Maybe I sound a little bit rude, but I remember the feeling that I had a few years ago about them with their Fairfax reports and I think that memory will last for decades.

 

Cheers!

[shalab]

I think this goes well with the internal/external score card story from the snowball. The rating agencies will come to their senses someday. The train traffic looks like it is picking up which means better outcomes for BNI.

 

Buffett has been optimistic that he is going to beat Mrs B and Methuselah since the nineties.

 

We will see how this unfolds. My bet is with Mr. B.  ;D

[Viking]

Partner, after I read the post my thoughts mirrored those of yours, although I am hopeful it does not last for decades as life is too short  ;)

[Parsad]

Hi Partner, I agree with your sentiment, but unfortunately just like with Fairfax, it does matter.  Berkshire's cost to finance their debt, including debt issued by MAE or Berkshire Hathaway Finance will go up marginally.  If more credit rating agencies follow suit, those costs could increase a bit further.  Over time, it does make a small impact in intrinsic value. 

 

Hopefully, various aspects of Berkshire will start firing on all cylinders and cash will start flowing back like before, and at that point the credit rating agencies will come back to their senses.  In the meantime...Cheers!