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Thursday, February 04, 2010

Berkshire loses AAA rating from S&P

I don't view this as bad news. I view it as an opinion about opportunities for investing excess cash.
“The [Burlington Northern] railroad acquisition will reduce what historically has been extremely strong capital adequacy and liquidity,” S.&P. said. “Risk tolerances appear to have increased.”
So Buffett is willing to take on more risk now.

The universe of investments available to Berkshire are very limited and I'm surprised that they weren't hell-bent on losing their AAA rating a year ago. Maybe things really did look that scary back then.

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