Has it really been 2 months since I blogged? It's be quite hectic and I just haven't found time to do anything except just to keep my head above water. The S&P downgraded HKG property companies and the market was off 200 points at one stage. Good of the S&P to do this. It just confirms my belief that the market has bottomed. The rating agencies are the last to know!!! They continued giving Enron good ratings right up until it went bankrupt.

The timing of the announcement left a bit to be desired though. They announced it in the middle of the day and caused havoc in the markets.

I am a bit peeved because the rating agencies really should rate a company on its ability to service debt and not on profits prospects (although you can argue that it is related). However, the companies they downgraded all have tons of cash and multiple earnings/interest cover. I don't get it?

Some unsophisticated investors took the debt rating downgrade as a downgrade of the stock. They were unable to distinguish between debt ratings analysts and stock analysts. Sometimes, I think they are both totally useless. The rating agencies got their start back when communications were not that good and investors did not visit the companies ... now ever company does road shows, there is more transparency, and analysts do company visits. Do we still need rating agencies?