Commodity Trading & Trend Following

Aren’t we all having issues with the current “Recession”. Now Warren Buffett and Berkshire Hathaway Inc is having theirs. Berkshire Hathaway has had big losses in its stock portfolio with losses in Wells Fargo & Co. and American Express Co. Besides stock losses the next problem is the rating of the company itself. The irony is that one of his companies ( Moodys) is the one lowering the rating on Berkshire Hathaway. Moodys is a rating agency similiar to Standard & Poor’s. Rating companies came under sharp criticism for issuing high ratings prior to the Mortgage meltdown. Too many of the CLOs, CMOs and CDOs ( collateral debt obligations,Collateral Mortgage obligations, Collateral debt obligations) that were given high ratings have been proven to virtually worthless.

Moody’s yesterday lowered the long-term issuer rating of Berkshire to Aa2 from its top Aaa rating.The problem with downgrades is that they can impact borrowing costs, and hurt its ability to charge maximum rates for insurance policies written by its subsidiaries.

Surely Buffett is a long term investor, the true Buy and Hold. Time will tell how all of this sorts out. Has Buffett lost his magic touch?

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