S&P Global looks very bullish after TCI's Chris Hohn expressed strong confidence in growth at the ratings agencies. Per the call notes, investment-grade ratings are supported by the AI buildout, sub-investment-grade by huge maturity walls, and Hohn believes the market is wrong to reprice these businesses lower as yields rise. x.com 

Moody's is one of the world's most beautiful businesses because trusted ratings take decades to establish, protecting its duopoly with S&P and its pricing power. Operating margins exceed 45%, and Moody's Analytics subscriptions make revenue quite resilient when companies issue less debt. Decades of credit-risk data are a huge AI product opportunity; fast-growing private credit also needs ratings. x.com 

Moody's and S&P Global could de-rate from high starting multiples if generalist portfolio managers come to see them as FICO 2.0. Their industry structures differ, but parallels in standards, pricing power and regulatory exposure could build a narrative that their pricing power is tapped out after the FICO case study, compressing multiples further. So far their de-rating has come from macro and AI pressure, not such fears. x.com  x.com  x.com 

The Fed's September 16 quarter-point hike affects the high-moat portfolio differently from the simple picture of borrowers paying more. Bond-rating companies are having record quarters because the AI building boom keeps borrowing whatever rates do, while brokers that should win get only a small bump. The real damage falls on home loans and on the price investors will pay today for profits far in the future, which is where most of the portfolio sits. x.com 

S&P Global collects a toll on new bonds and money flowing into index funds. It is a five-year buy at today's valuation despite a roughly 16% year-to-date share decline amid AI fears: last quarter ratings revenue grew 17%, index revenue 20%, and EPS 23%. Free cash flow per share has compounded 14.5% annually since late 2016. x.com 

S&P Global's moat may be weaker than its ratings pricing power suggests, and its gross profit dollars are likely to come under pressure as AI does more of the work, even if margins rise. FICO and the credit bureaus once looked just as required and oligopolistic until Vantage, with regulatory help, built a better product and upended pricing. The market is skeptical of historical data resale, as with CoStar and Verisk; the index business looks durable. x.com 

The market is wrong to reprice Moody's and S&P Global just because yields are rising. Per @moats_multiples' notes from a TCI call, Chris Hohn is very confident about ratings-agency growth, with investment-grade ratings supported by the AI buildout and sub-investment-grade by huge maturity walls. TCI's large positions in both fit that view. x.com 

Credit tightening and data-center delays threaten the debt-funded AI boom behind the S&P 500. Junk-bond sales fell from $51B in September to $7B in October's first three weeks; CCC yields hit a four-year high, though quality firms still borrowed. Per S&P Global, 146 data-center projects were delayed or canceled, potentially weakening buildout credit. With 40% of the index in 10 names, this is dot-com and 2008 combined; stocks have not caught up, and even good firms may be sold. x.com 

S&P Global's ratings and indices could form an exceptionally profitable, wide-moat standalone business. Without its other units, their implied operating margin would be around 68%, among the market's top five; that makes further spinoffs sensible, though the separation is hypothetical. x.com  x.com 

Debt-funded AI building is making tech stocks vulnerable to a 25-30% pullback as rates and energy prices rise. AI company borrowing reached $466B this year versus $101B a year earlier; weekly default-insurance trading on seven AI names rose from under $2B in July to over $9B in September. Keep cash for lower prices, though 30% earnings growth and a 19x market multiple argue this is not an AI bubble. x.com