Can you Rely on Stock Rating from Moody's and other Ratings Companies?

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Can you Rely on Stock Rating from Moody's and other Ratings Companies?


At a time when many people have lost lots of money in the stock market we find out that perhaps ratings companies have not been gStock Marketive more weight to earnings than to other financial indicators. Congress is looking into allegations that ratings companies failed to rate stocks appropriately that were backed by mortgages.


Many investors have put their trust in companies such as Moody’s and Standard & Poor’s. Now there are allegations being made by whistleblowers within companies such as Moody’s that earnings were being weighted inappropriately when scoring stocks and bonds. Unfortunately many investors feel disadvantaged already when compared to institutional investors that are able to access more financial data. At the very least this calls into question how much these ratings should be relied on by the average investor.




To read the story check out this link.

Reuters' Story "Moody's Secretive Nature Described to Congress" dated Sep 30, 2009

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Charles G. Perkins, CPA

Servings Small Businesses in the Puget Sound Area


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Theodora Wu
TJ Investments - Burien, WA

That sure makes me feel uncomfortable about my retirement funds.  The market is bad enough without this.

Oct 01, 2009 07:24 PM #1
Terry Chenier
Homelife Glenayre Realty - Mission, BC


Based on what I've seen lately, I'm putting mine under my mattress.

Oct 02, 2009 12:22 AM #2
Charles Perkins
Charles G. Perkins, CPA - Burien, WA


Many have gotten completely out of stocks.  Those that are still in have to rely on something and faith sure shattered when you find out that the ratings may not mean what you think.



I think a lot of people would rather has their money under there mattress.  Some would rather it actually be  gold, though that get's a little uncomfortable under the mattress.

Oct 02, 2009 01:29 AM #3
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