Whispers of Return: Visa & Moody’s

Many years later, as the dust of forgotten valuations settled and the scent of damp paper clung to the ledgers, old Manolo remembered the whispers. Whispers of two companies, solid as the mountains, yet strangely adrift in the currents of the market. He’d seen fortunes bloom and wither like bougainvillea, but these two… these held a peculiar resonance, a quiet dignity even in their temporary eclipse. It was 2026, and the echoes of their potential were beginning to stir.

Visa and Moody’s, names spoken with a reverence usually reserved for ancient lineages, had known decades of prosperity, a steady accumulation of wealth that seemed as inevitable as the rising sun. But even the most enduring dynasties face periods of shadow. Visa, the silent facilitator of countless transactions, had dipped, a mere 8% decline in the year, a fleeting stumble for a company that had averaged a 16% annual return over the past decade, a legacy stretching back to 2008. It was a rare disquiet, a momentary lapse in a rhythm perfected over years.

Moody’s, the arbiter of credit, the silent judge of nations and corporations, had fared similarly. A 12% dip year to date, 14% over the past year. A whisper of uncertainty, a momentary clouding of its usually clear vision. Yet, its history, like a well-worn map, revealed a pattern of strength, an average of 17% annualized return over the last decade, a steady climb since 2008. It was a pause, not a collapse.

The astute observer, the one who understands that markets are not driven by frenzied emotion but by the slow, deliberate forces of value, recognizes this as an opportunity. A chance to acquire shares in companies possessing not merely growth potential, but something far more substantial: a moat, wide and deep, protecting them from the relentless tides of competition. These aren’t mere businesses; they are cornerstones of the financial world.

Both Visa and Moody’s share a common patron, a silent guardian who understands the enduring power of value. Warren Buffett, through Berkshire Hathaway, holds significant stakes in both. Moody’s, the sixth largest holding, Visa, the thirteenth. It’s a testament to their underlying strength, a recognition of their ability to withstand the storms and continue to generate wealth. It’s a quiet endorsement, spoken not in press releases, but in the allocation of capital.

The reason is simple, almost elemental. They operate within duopolies, each controlling a significant share of their respective markets. Moody’s and Standard & Poor’s, each claiming roughly 40% of the credit rating landscape. Visa, with 52% of the payment processing market, joined by Mastercard at 23%, together commanding 75% of the flow. It’s a dominance not built on fleeting innovation, but on the sheer scale and network effects that make them indispensable. To challenge them is to attempt to divert a river with one’s bare hands.

The recent downturns, however, are not the result of fundamental weakness, but rather the capricious winds of external forces. Visa has faced scrutiny from legislators, a bill threatening to dismantle the Mastercard-Visa duopoly. It’s a political drama, played out in the halls of power, its outcome uncertain. Even the endorsement of a former president cannot guarantee its passage. The industry, naturally, is fighting back, lobbying with the fervor of those defending their ancestral lands.

Despite this, Visa has continued to perform admirably. Revenue grew 15% year over year in the most recent quarter, earnings climbing 17%. And the outlook for 2026 is promising, with expectations of low-double-digit growth. It’s a quiet resilience, a refusal to be deterred by the noise and distractions.

Moody’s, too, has demonstrated its strength. While a rival, Standard & Poor’s, stumbled with disappointing results, Moody’s beat estimates, with revenue up 13% and earnings soaring 57%. And the guidance for 2026 is even more encouraging, projecting 10% to 14% earnings per share gains. It’s a subtle defiance, a quiet assertion of its dominance.

The analysts, those modern-day soothsayers, overwhelmingly recommend Visa, with 90% issuing buy ratings and a median price target suggesting a 27% upside. Moody’s fares similarly, with 67% of analysts recommending a buy and a median price target indicating a 30% gain. And both companies are trading at valuations near their recent lows, a rare opportunity for the discerning investor.

Old Manolo, gazing out at the horizon, knew that the whispers would soon turn into a chorus. The dust would settle, and the true value of these two companies would be revealed. They would bounce back, not with a sudden surge, but with the steady, unwavering momentum of those who have weathered countless storms. It wasn’t merely a prediction; it was an inevitability, written in the language of value, and understood by those who knew how to read it.

2026-02-22 22:13

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