Roger S. Conrad, leading adviser on essential services stocks, bonds and preferred stocks answers the question on how much credence should we give credit rating agencies like Standard & Poor’s, Moody’s and Fitch after the recent financial crisis? After all, these are the very same credit raters that “misjudged the risk to the financial system before the crash. Their biggest mistake, obviously, was underestimating the risks from mortgage-backed securities, for which at one time they were handing out AAA ratings on like candy’.

He goes on providing more examples, “Worse, this is hardly the first time they’ve completely missed the boat on a major industry meltdown. Back in 2001, for example, S&P rated Enron investment-grade the day that company filed for Chapter 11 bankruptcy. WorldCom also held high ratings right up until it wiped out its stockholders”.

According to Conrad, “the worst time to look at credit rater research is when an industry has been strong for a long time.”

And the best?
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