market folly

In a SEC Form 4 filed just now, Warren Buffett's Berkshire Hathaway (BRK.A / BRK.B) has disclosed that they sold 6,201 shares of Moody's (MCO) on February 2nd at a weighted average price of $28.4566 per share. Berkshire still owns 31.8 million shares, where 16 million of those are owned by National Indemnity Company, and 15.7 million of which are owned by GEICO, both subsidiaries of Berkshire Hathaway.

This marks the umpteenth time that Buffett has sold shares and we detailed his sales as recently as late December. Additionally, Berkshire also sold shares in early December, had previously sold Moody's shares in late October, and in months prior as well. As you can see, he is obviously reducing his position size methodically and we've noticed a pattern with his sales. Each time shares of MCO hit the $25-$30 range, he unloads some. We'll have to see if this trend continues because keep in mind, he still owns over 31 million shares.

In Whitney Tilson and hedge fund T2 Partners' annual letter, we saw that they were short Moody's (among other names). Hedge fund colleague David Einhorn & Greenlight Capital are also short MCO. In Einhorn's recent investor letter, he mentioned how this short position has been causing them pain, but they still feel Moody's faces headwinds. Buffett has to be at least somewhat worried about the business going forward as he continues to shed shares on a frequent basis.

Taken from Google Finance, Moody's is "a provider of credit ratings and related research, data and analytical tools, quantitative credit risk measures, risk scoring software, and credit portfolio management solutions and securities pricing software and valuation models. The Company operates in two segments: Moody’s Investors Service (MIS) and Moody’s Analytics (MA)."