Berkshire Hathaway Sells Moody's For 2nd Time This Week ~ market folly

Friday, March 26, 2010

Berkshire Hathaway Sells Moody's For 2nd Time This Week

We have yet another recent transaction out of Warren Buffett's Berkshire Hathaway. And, you guessed it, they're selling more Moody's (MCO) shares. Just a few days ago we noted how Buffett was selling MCO and their latest Form 4 filed with the SEC shows recent activity on March 23rd & 24th. On the 23rd they sold 148,054 shares at a weighted price of $30.2195. The next day they sold 57,574 more shares at $30.3661. After these sales, they still owned 30,786,876 shares. Please note that these shares are owned by NICO and GEICO, subsidiaries of Berkshire Hathaway. As we pointed out before, it's very clear that Berkshire finds anything above $25 as a fair price to sell MCO shares at and they tend to sell shares in the high-20's. To learn how to invest like the legend himself, head to Warren Buffett's recommended reading list.

The rationale behind these sales is still somewhat up in the air. Before the Burlington Northern acquisition, Buffett was selling MCO shares to help finance that transaction. However, they still continue to sell some Moody's so they could also be looking to reduce their overall position size. Or, they possibly could just view the current share price as fair value because there's a pattern as to what price they sell at. Others have speculated that Berkshire is less comfortable with their MCO exposure based off of Buffett's previous comments about Moody's. In the end, it's most likely some combination of multiple reasons though. We just wanted to update you on the latest round of transactions and it most likely will not be the last.

Taken from Google Finance, Moody's "a provider of credit ratings; credit and economic related research, data and analytical tools; risk management software, and quantitative credit risk measures, credit portfolio management solutions and training services."

For more from the legendary investor, head to Berkshire Hathaway's annual letter and Warren Buffett's portfolio.

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