Author Topic: WFC - Wells Fargo  (Read 445814 times)

CorpRaider

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Re: WFC - Wells Fargo
« Reply #1190 on: February 16, 2020, 10:49:04 AM »
Yeah all we know is that he hasn't sold a share.  We can speculate about motives, just like with WEB (who also sold a good slug of WFC in 2018 and when asked about it was like meh, we still like it and would buy more...well he did qualify that it might not gleefully).

I personally doubt the god of long-term, quality-compounder bro, investing (and thinking in opportunity costs) is letting a 21% marginal tax hurdle on gains prevent him from making a change if he feels a franchise has been materially impaired.  I also recall that he was raving (like pounding the table) about the quality of said franchise a year ago on national TV and during BRK AGM and nothing has changed since other than hiring a wunderkind CEO and resolving/reserving for big chunks of litigation (Sloan was already fired and he didn't like it then either).

I gotta' stop posting/writing about WFC I am getting too enthused...all the negative sentiment...all the negative rates/permanent deflation...all that obvious bubbling/cover for change....all that hidden earnings power. 

Dudes posting about needing help to execute financial transactions on the same board, highlighting why you might want a branch you can walk into if you are dealing with real money...so on and so forth.
« Last Edit: February 16, 2020, 03:15:20 PM by CorpRaider »


Cigarbutt

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Re: WFC - Wells Fargo
« Reply #1191 on: February 16, 2020, 11:09:07 AM »
2-
Just a remark on the choice of buying WFC in early 2009. It appears that Mr. Munger's timing was perfect but I assume he would accept that such exact timing was lucky (to the extent of the exact timing). I find the retrospective exercise interesting because there were a lot of potential opportunities then. It's also interesting because if you compare the total return of holding WFC (assuming buying near absolute lows in February and March of 2009) and buying the S&P 500 index at the same time, the net result (as of now, assuming holding during the entire period) is about the same!
This is not to put a shade on Mr. Munger's amazing stock picking abilities but one could argue that it would have been less "risky" to buy the index in early 2009 and to go fishing after (or ride a catamaran or whatever).
That's the thing about investing though isn't it? You can say the above and be about right. But that assumes efficient markets and that the S&P and WFC are priced correctly. If they aren't then you're not right. And therein lies the rub. Because at this point in time at least one of them is not priced correctly.

If we go back to 2018 you'd look like a fool saying the above because WFC outperformed the hell out of the S&P. So at that point it sure looked like Munger made a very wise choice going with WFC vs S&P and catamarans. And I am 100% sure that 2 years from now the situation will be a lot different than today. Munger's choice will again be a wise one, or he'll look like a damn fool for making it. It's just how this game that we chose to enter works.
Retrospective analysis is fraught with pitfalls and arbitrary choices of dates is one of them. You are correct in suggesting that the differential return would have been favorable (perhaps a few % points per year and even higher with the perfect timing of sales) by retrospectively selecting hypothetical selling time points but the fact is that Mr. Munger did not sell at those dates.

Also, a 10-year period is a reasonable (long enough) period to evaluate "performance". I think Mr. Buffett has suggested 3-year or 5-year periods as reasonable minima. I think it's reasonable for an individual investor to assess the validity (retrospective) of active investing vs the index over longer time-periods and to switch accordingly unless the pleasure of stock picking overrides the cost (or vice-versa).

There are times that are different and, who knows, maybe this is such a time.
Since this thread is about WFC, I will stick my neck out.
This thread and other similar threads about large well established and traditional banks contain inputs that suggest that those banks constitute good long-term investments, an assessment I agree with from the point of view of relative performance. I've always liked WFC (and USB and some others) but count on the possibility that those banks will underperform before they outperform.

fareastwarriors

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Re: WFC - Wells Fargo
« Reply #1192 on: February 21, 2020, 01:42:11 PM »
Wells Fargo to pay $3 billion in settling criminal and civil investigations into its fraudulent sales practices


https://www.cnbc.com/2020/02/21/wells-fargo-to-pay-3-billion-in-setting-criminal-and-civil-investigations-into-its-fraudulent-sales-practices.html

gokou3

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Re: WFC - Wells Fargo
« Reply #1193 on: February 21, 2020, 05:25:15 PM »
Looks like the asset cap is still in place?  Wonder if there is any timeline for removal..

CorpRaider

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Re: WFC - Wells Fargo
« Reply #1194 on: February 24, 2020, 04:27:47 AM »
This morning's interview kinda' sounds like WEB might be dumping WFC doesn't it?  Reminds me of the IBM thing.

Lemsip

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Re: WFC - Wells Fargo
« Reply #1195 on: February 24, 2020, 04:46:26 AM »
This morning's interview kinda' sounds like WEB might be dumping WFC doesn't it?  Reminds me of the IBM thing.
100% replay of his IBM language. Sure it will be reduced steadily to zero  this year.

CorpRaider

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Re: WFC - Wells Fargo
« Reply #1196 on: February 24, 2020, 05:00:38 AM »
I wish they would ask him about Scharf.  If he didn't do the gushing Dale Carnegie thing it might reveal a lot.  That's the only thing that has really changed since the last time he spoke about it.  If they said we don't think you should get a wall street ceo and they weren't in favor of Scharf (weird bc they were buying BK while he was CEO...but maybe that was T&T).  I could see the change if Scharf in opinion pitched the board on his vision of having WFC emulate JPM totally...including creating a similar investment banking operation.  I would be out on that change too.

I kind of think it more likely they endorsed him since the WFC board had to recruit him so hard and they killed the candidacy of that Goldman target. 
« Last Edit: February 24, 2020, 05:03:17 AM by CorpRaider »

Foreign Tuffett

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Re: WFC - Wells Fargo
« Reply #1197 on: February 24, 2020, 06:19:40 AM »
This morning's interview kinda' sounds like WEB might be dumping WFC doesn't it?  Reminds me of the IBM thing.
100% replay of his IBM language. Sure it will be reduced steadily to zero  this year.

Link to video? Or at least summarize what he said?

Schwab711

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Re: WFC - Wells Fargo
« Reply #1198 on: February 24, 2020, 07:30:22 AM »
It probably doesn't have to do with Scharf so much as BRK frustrated with WFC's relationship with regulators. The asset cap is a really big deal and it will continue to hurt the company for years after it is lifted. WFC is going to have material vintage risk soon, as they can't grow to reduce prior vintage exposure. They are going to be forced to choose between low returns or increased risk repeatedly.

I really hope the Fed doesn't use asset caps as punishment going forward. It seems like it could lead to more systemic risk.

Foreign Tuffett

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Re: WFC - Wells Fargo
« Reply #1199 on: February 24, 2020, 08:08:24 AM »
This morning's interview kinda' sounds like WEB might be dumping WFC doesn't it?  Reminds me of the IBM thing.
100% replay of his IBM language. Sure it will be reduced steadily to zero  this year.

Link to video? Or at least summarize what he said?

NM, I found it.

https://thereformedbroker.com/2020/02/24/everything-warren-buffett-said-on-cnbc-this-morning/