Century_XI

Why I'm Shorting Moody's

Sure I don't. By the way, I don't question your skills; at all. I hope you're doing well. It's just that those of us who are long term holders of MCO (an endangered species it seems) need from time to time to score some victory over the bears.

I couldn't help but write...

Best regards.


On Oct 22 07:48 PM TraderMark wrote:

> already stopped out
>
> www.fundmymutualfund.c...
>
>
> Seeking Alpha only posts a portion of my blog entries... so you don't
> see all the transactions here.
>
> Thanks for your concern.

Why I'm Shorting Moody's

Hello! Did you take your stop yet? If not, hurry up, cuz earnings report is coming! The clock is ticking....

Annals of Pathetic CEO Communication, Moody's Edition

I view Rubens' point as perfectly valid. I agree that MCO is a bargain a these levels and that we'll make a mint out of it. Those who dump their shares at these prices simply do not understand the strenght of the franchise the three leading credit rating agencies have. The simplest of DCF analyses shows that the P/E for a business with a return on total capital of roughly 50% is well above 20. If concerned about the future earning power of MCO ask yourself: Is this credit crisis the end of structured finance? Or is it simply a one or two year downsweep? When the housing slump ends (which will happen), current fear will vanish and markets will rally and nobody will care again about subprime asset backeds, CDOs, CPDOs and the like. Structured finance deals will regain momentum and the agencies will be there to profit from rating them. As Buffett said, this is a "no brainer".

However, Bearfund is right in that Felix's point was different. And, regarding this, I was struck too at reading McDaniels' verbatim copy of the previous corporate press release. It is indeed dissapointing to see that the CEO could not come up with something better than the bureaucratic quote of a lesser officer.

Fortunately for us, MCO's business is so strong that even with subpar management it is bound to flourish.