Saturday, March 14, 2009

Fitch and Buffett's age-The same old story repeated again

Fitch downgraded Berkshire Hathaway Thursday, partly because of Warren Buffett's age:

"Fitch’s belief that Berkshire’s record of outstanding long-term investment results and the company’s ability to identify and purchase attractive operating companies is intimately tied to Mr. Buffett"

So let's go back four years ago, when Fitch downgraded Berkshire's outlook to "negative" from "stable."

Their reason?

Fitch said that while Buffett, known as the Sage of Omaha, is 'reportedly in good health and has expressed no intention of retiring', it would not be easy for Berkshire to replace his talent or sustain his strategies after his departure.'

He also had this to say about Berkshire in a NY Times article four years ago:

''A lot of what makes Berkshire tick is Mr. Buffett,'' said Keith Buckley, a managing director at Fitch Ratings, a firm that monitors insurers. ''They are one of the only companies I can think of where they can have that much cash and can say to investors to be patient because they know when the time will come to use it properly. That's entirely because of Mr. Buffett's presence.''

Fitch recently downgraded Berkshire's credit outlook to ''negative'' from ''stable,'' noting in a research report that Fitch ''does not believe that Mr. Buffett's talents can be easily replaced, or that Berkshire's current strategies would be sustainable in his absence."

You should just downgrade Keith Buckley from Fitch instead!

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