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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (50819)	2/8/2013 11:55:35 AM
From: AFed	Respond to of 78705

(MHP) Thanks for the reply Clown. EV Calc = the data service providers (S&P, et. al.) frequently under-count WASO due to dilutive employee comp, have yet to pro forma for the McGraw-Hill Education sale to Apollo, and I am pro forma'ing for a settlement and 2013E cash flow. But regardless though, we're in the same ballpark (what's a billion $ amongst friends ;)). Impact of Future Legislation on Business = you raise a number of very good points to ponder. The rise of new competitive entrants is a real risk, no doubt about it. With this one though, I put my Buffett hat on and ask, "Does the ratings oligopoly exist because Governments haven't allowed / encouraged a more perfectly competitive marketplace, or is it because there's something inherent about the industry that trends toward oligopoly." I think it's the latter. Why? (1) Issuers hate paying 3 ratings agencies for opinions, let alone 10 ratings agencies. (2) It's tough to get apples-to-apples comparisons across securities when you're dealing with multiple ratings agencies. Add 7 more agencies and you get that many more apples-to-oranges comparisons. (3) Since these ratings have very serious impacts on collateral-requirements and funding costs (a very good point you raise, btw), neither issuers nor buyers (i.e. banks, insurance companies, etc.) want to be forced to use a "Ratings Agencies Consensus" to determine their capital requirements. They want "one-neck-to-choke" when it comes to potential downgrades -- the US Government prefers to have 3 issuers to jawbone as opposed to 20 when it comes to being downgraded from AAA to AA. Anyway, I suspect the conversation we're having right now was the same conversation investors were having about the Wall Street banks following the Global Research Settlement in the 2001-02 timeframe... the "New Normal" that eventually just became the "Old Normal," Cheers

To: Spekulatius who wrote (50819)	2/9/2013 11:40:50 AM
From: Spekulatius	Read Replies (1) \| Respond to of 78705

I purchased just a few shares of MHP at 42.5$ on friday as the price hit my first limit order. I agree that there is a good deal of uncertainty about the legal exposure for damages. My belief is that the case against S&P is weak. Those emails that have been circulated (let's hope we are retired... etc.) were already known in 2009/2010 and are not specific enough imo. The other thing that has not been discussed, is the statute of limitation, which means that times runs out to make a claim . It depends on the claim and the state and is 6 years for some claims but for example 4 years for breach of contract in CA. We are now 4-5 years after the financial crisis, which means that the statute of limitations, will limit the pool of claims. In fact I believe, for most paper that has been rated and went bad, the time has already run out. The government has may have started this lawsuit to make a last ditch effort to get anything. nolo.com courts.ca.gov Just my opinion. I am not a legal expert.

To: Spekulatius who wrote (50819)	5/1/2013 9:58:44 PM
From: E_K_S	Respond to of 78705

Are you considering selling some of those shares? Buffett Further Trims Moody’s Stake as Shares Surge 21% By Dan Reichl - May 1, 2013 5:21 PM PT goo.gl 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. ----------------------------------- Hindsight says that this was quite a buy 2/6/2013. Unfortunately I did not pull the "value" trigger. EKS