Berkshire outlook upgraded at S&P


Large investments in common and preferred stocks, as well as an "aggressive acquisition strategy," pose risks, but earnings stability offsets those concerns, says S&P, affirming its ratings on Berkshire Hathaway (BRK.A, BRK.B) - AA/A-1 counterparty credit, and AA+ insurance financial strength - but boosting the outlook to stable from negative.

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Comments (3)
  • Michael Bryant
    , contributor
    Comments (7201) | Send Message
     
    AA/A-1 credit rating for (BRK.A). Is that a joke?
    23 Jun 2014, 09:43 PM Reply Like
  • Invest Rookie
    , contributor
    Comments (68) | Send Message
     
    BRK A has a lot of debt ;)

     

    The real joke is the "aggressive acquisition strategy" whereas BH didn't do anything significant since last june's NV Energy buyout.
    24 Jun 2014, 09:18 AM Reply Like
  • CapVandal
    , contributor
    Comments (812) | Send Message
     
    Rating agencies are fine as a rough gauge of financial strength. They always have and always will be worthless to an active investor.

     

    Pension fund managers, creditors, counter parties all need to fill in the boxes to prove they aren't totally asleep. They can also be a useful screen for fixed income investments.

     

    "A story on bloomberg.com states that bonds sold by Warren Buffett’s Berkshire Hathaway (BRK.A, BRK.B) are trading at “3.5 basis points less than Treasuries of similar maturity”." From 2010.

     

    I like the bond markets first as a market based implicit rating, then credit default swaps, and finally rating agencies. I will say that credit default swaps can get significantly out of whack and actual bond markets are by far superior.
    23 Jul 2014, 11:14 PM Reply Like
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