Moody's Corporation - Investment Thesis
Why Warren Buffett and Berkshire Hathaway invested in Moody's Corporation.
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Moody's Corporation - Investment Thesis
1. Regulatory Moat
Most bond issuances legally require a rating from an "NRSRO" (Nationally Recognized Statistical Rating Organization). Moody's is one of only a few.
2. Network Effects
More bond issuance → more need for ratings → Moody's is the default choice.
3. High Switching Costs
Once a company is rated by Moody's, changing rating agencies is disruptive and expensive.
4. Pricing Power
Moody's raises prices annually. Governments and corporations need ratings — they'll pay.
Learn more at Moody's Corporation