Author Topic: WFC - Wells Fargo  (Read 343028 times)

meiroy

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 787
Re: WFC - Wells Fargo
« Reply #1080 on: July 18, 2019, 01:02:22 AM »
WHY is it that WFC still does not have a CEO?

As an example, at DANSKE it took a long time, too. When the headhunter introduces a potential subject for the position to the chairman, and a meeting for conversation is set up, the potential subject has by far more questions for discussion to the chairman than the other way around. Such a setup can be highly annoying, and thereby counterproductive.

Wells Fargo CEO seat is basically “radioactive”. Not many candidates wants to deal with Congress , politicians, regulators while running a business at the same time. This will whittle down the pool of candidates significantly.

Yeah, you know why is a person supposed to work for $20M salary or such? $20M positions should come with no duties attached. Just the private jets, soirees, and golf clubs please.

Somehow the "radioactive" positions that involve dealing with disgruntled customers threatening bodily harm, hey even dealing with convicted felons get filled at wages closer to minimum wage. But that's for schmucks. The CEO caste is different. All hail the CEOs and shower money on them.

It just could be that WFC may be having trouble filling its CEO position because the issues at the bank are still more serious than generally understood. Over the last 2.5 years there has been a steady stream of negative press. Perhaps the CEO vacancy is saying more about the issues at WFC than the character of the CEO candidates who are not interested.

+1


mountboney

  • Newbie
  • *
  • Posts: 48
Re: WFC - Wells Fargo
« Reply #1081 on: July 18, 2019, 06:51:25 AM »
The CEO process is more complicated than normal as the candidate must be unofficially approved by Buffett and the bank regulators in addition to the BOD. It will take a while to do it properly.

DooDiligence

  • Hero Member
  • *****
  • Posts: 1819
  • ♪ 🎶 ♫ ♪ 🎶 ♫
Re: WFC - Wells Fargo
« Reply #1082 on: July 18, 2019, 07:21:34 AM »
The CEO process is more complicated than normal as the candidate must be unofficially approved by Buffett and the bank regulators in addition to the BOD. It will take a while to do it properly.

and meanwhile, the doors are still open & people are moving money around.
Healthcare 25.2% - CVS EW NVO // BRK.B - 23.1% // Auto's & Oil 14.8% - CLB GPC VDE

Media & Communication 8.4% - CHTR DIS // Banking 6.6% - WFC // Drinkers & Smokers 5.5% - MO

Tech 0.0%

%'s held @ MV 08/15/2019 minus 16.6% investable cash

i trumpet my ignorance

https://twitter.com/tunawish

RuleNumberOne

  • Full Member
  • ***
  • Posts: 159
Re: WFC - Wells Fargo
« Reply #1083 on: July 18, 2019, 08:39:09 AM »
WFC is a simple, very-wide-moat business, Buffett & Munger's all-time favorite. I just don't think the CEO is that important here:

1. Munger's largest position at DJCO forever.
2. Buffett's only big purchase in 2006-2007 at around $35 per share, has been invested since 1989.
3. Buffett's largest investment for some years after the 2008 crisis, kept buying it even at its current $46 price.
4. Buffett said in or around March 6, 2009 that if he had to put all his net worth into one investment that day, it would be WFC.
5. Buffett said on CNBC that he picked 2 out of 4 CEO names shown to him by the WFC Chairman. If a CEO was that urgent, Buffett would have made them hire someone.

From my point of view:
1. WFC gives the best customer service in the branch. Customers get pampered because there are 3x the number of tellers at other banks.
2. Customers have always known WFC employees want to open as many checking account as possible, even cancel existing ones and replace with new ones. This is not news to them (has been that way for 20 years), they can't understand why Elizabeth is so upset about their favorite bank.
3. Checking account customers keep growing every quarter at WFC.
4. Retail deposits keep growing every quarter at WFC.
5. Elizabeth Warren trying to impress the 40% of American households served by WFC. Instead she comes across as completely unhinged to the typical American.
6. I have been a loyal customer for a very long time. Currently has the most honest mortgage brokers by far, compared to other banks.

When Europe comes apart, IMO WFC/USB/PNC/MTB will be the ones without European exposure (I hope!). Though I am a BAC customer and trade it sometimes, BAC is involved in buying bad assets from bailed out Monte Paschi (17% non-performing loans, completely crooked accounting etc)!

I just feel much safer with WFC even without a CEO. It could have bought Lehman, Bear or ML during the crisis, but chose to stick with its knitting and bought Wachovia.
« Last Edit: July 18, 2019, 08:43:46 AM by RuleNumberOne »

RuleNumberOne

  • Full Member
  • ***
  • Posts: 159
Re: WFC - Wells Fargo
« Reply #1084 on: July 18, 2019, 09:01:27 AM »
The only thing that would scare me is if we have a housing bubble (WFC is the largest home mortgage lender), but today we are very far away from it:

https://www.bloomberg.com/news/articles/2019-07-17/close-to-40-of-u-s-homes-are-free-and-clear-of-a-mortgage

"About 37% of U.S. households are “free and clear,” meaning they no longer have a home mortgage to pay, according to a Zillow data analysis. "


Equity rich is defined in this article as loan-to-value < 50% :

https://www.prnewswire.com/news-releases/equity-rich-us-properties-increase-to-new-high-of-14-5-million-in-q3-2018--300745870.html

(I think WFC is the major bank for the west coast?, 3 of the top 5 states are West Coast)

"Highest equity rich share in California, Hawaii, Washington, New York, Oregon
States with the highest share of equity rich properties were California (42.5 percent); Hawaii (39.4 percent); Washington (35.3 percent); New York (34.9 percent); and Oregon (33.6 percent).

Among 7,290 U.S. zip codes with at least 2,500 properties with mortgages, there were 417 zip codes where more than half of all properties with a mortgage were equity rich.

The top five zip codes with the highest share of equity rich properties were all in the California Bay area: 94087 in Sunnyvale (87.1 percent equity rich); 94085 in Sunnyvale (86.7 percent equity rich); 94086 in Sunnyvale (86.7 percent equity rich); 94063 in Redwood City (85.9 percent equity rich); and 95130 in San Jose (85.7 percent equity rich)."

« Last Edit: July 18, 2019, 09:10:38 AM by RuleNumberOne »

John Hjorth

  • Hero Member
  • *****
  • Posts: 2657
Re: WFC - Wells Fargo
« Reply #1085 on: July 18, 2019, 09:12:37 AM »
The CEO process is more complicated than normal as the candidate must be unofficially approved by Buffett and the bank regulators in addition to the BOD. It will take a while to do it properly.

mountboney,

What do you base that claim/statement on?
« Last Edit: July 18, 2019, 09:15:29 AM by John Hjorth »
”In the race of excellence … there is no finish line.”
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai

samwise

  • Jr. Member
  • **
  • Posts: 54
Re: WFC - Wells Fargo
« Reply #1086 on: August 01, 2019, 09:43:32 PM »
Safest 10.5% current earnings yield on a GDP grower. Even 14% maybe when they resolve their temporarily elevated costs.

How big a portion of your portfolio is this? Can it be 25%, 40%?

chompsterama

  • Newbie
  • *
  • Posts: 12
Re: WFC - Wells Fargo
« Reply #1087 on: August 02, 2019, 09:26:42 AM »
Safest 10.5% current earnings yield on a GDP grower. Even 14% maybe when they resolve their temporarily elevated costs.

How big a portion of your portfolio is this? Can it be 25%, 40%?

Read this mornings WSJ article "Families Go Deep in Debt to Stay in the Middle Class" and you might think hard about a 40% position.

Viking

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 1495
Re: WFC - Wells Fargo
« Reply #1088 on: August 02, 2019, 09:27:20 AM »
Safest 10.5% current earnings yield on a GDP grower. Even 14% maybe when they resolve their temporarily elevated costs.

How big a portion of your portfolio is this? Can it be 25%, 40%?

Samwise, the big US banks have been a great investment for years. My challenge with having a big overweight position today is what happens if the US enters a recession in 2020? Earnings estimates for WFC for 2020 have come way down in the past 90 days due to what has happened to the yield curve (and WFC guiding to lower NII). If the US economy continues to chug along at 2% growth then WFC will do very well.

RuleNumberOne

  • Full Member
  • ***
  • Posts: 159
Re: WFC - Wells Fargo
« Reply #1089 on: August 02, 2019, 10:13:39 AM »
Viking,

The US will not go into recession with a fiscal deficit of 5% of GDP at the Federal level and states getting into spending of their own.

California (1/8th of US population and WFC's home ground) has a big budget surplus and has started digging up roads everywhere because they have to spend the money somehow. Even with all that digging, the surplus was so large that California also added to their rainy day fund.

Far cry from Italy which has set a budget deficit of 2% with 33% youth unemployment.