Author Topic: WFC - Wells Fargo  (Read 404491 times)

John Hjorth

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Re: WFC - Wells Fargo
« Reply #1160 on: February 14, 2020, 05:39:11 PM »
This isn't good. Does he think the problems at the bank are permanent? The stock right now reminds me of BAC in 2011. They've got all the infrastructure to be a solid big bank and there aren't that many of them. Bizzarre to me that he's giving up. Just like it was bizzarre that he never built up the JPM stake to 10% of shares out after that first purchase. Never bought back enough BRK stock at 200. Meanwhile $130 billion cash doing nothing and now liquidating WFC at a good valuation when IT is repurchasing 10% of stock per year.

Is the old man losing it??

I agree with your sentiment, but I also dont think WFC going from 10% to 8.xx% is anything to cry over given the other bank exposure in the BRK portfolio. All of which, IMO are of higher quality than WFC, although WFC is probably the cheapest. That said, and Ive long been a critic of Buffett's paralysis the last few years, with the markets behaving wilder than a group of co-eds on spring break, I'm glad Buffett has all of that cash in his portfolio, because I dont in mine. Its a nice little value hedge, which Ive quickly made about a 7% position, up from 0.0% in December.

Wouldn't it be rational [and prudent] to look at WFC as an investment as stand alone? It simply does not deliver, and hasn't done, now for years! [No matter what Mr. Buffett & Mr. Munger may have said, at Berkshire AGMs etc.]
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Gregmal

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Re: WFC - Wells Fargo
« Reply #1161 on: February 14, 2020, 05:48:16 PM »
This isn't good. Does he think the problems at the bank are permanent? The stock right now reminds me of BAC in 2011. They've got all the infrastructure to be a solid big bank and there aren't that many of them. Bizzarre to me that he's giving up. Just like it was bizzarre that he never built up the JPM stake to 10% of shares out after that first purchase. Never bought back enough BRK stock at 200. Meanwhile $130 billion cash doing nothing and now liquidating WFC at a good valuation when IT is repurchasing 10% of stock per year.

Is the old man losing it??

I agree with your sentiment, but I also dont think WFC going from 10% to 8.xx% is anything to cry over given the other bank exposure in the BRK portfolio. All of which, IMO are of higher quality than WFC, although WFC is probably the cheapest. That said, and Ive long been a critic of Buffett's paralysis the last few years, with the markets behaving wilder than a group of co-eds on spring break, I'm glad Buffett has all of that cash in his portfolio, because I dont in mine. Its a nice little value hedge, which Ive quickly made about a 7% position, up from 0.0% in December.

Wouldn't it be rational [and prudent] to look at WFC as an investment as stand alone? It simply does not deliver, and hasn't done, now for years! [No matter what Mr. Buffett & Mr. Munger may have said, at Berkshire AGMs etc.]

To BRK or to WFC? If you're going to sling single stock WFC, sure. But I've in the past made the mistake of getting hung up on such scrutiny, which I think misses the mark. Dec/Jan 2018-19 I "liked" the banks. I though Apple was kind of a pain, but also did agree with everyone else that the sell off was probably overdone. As such, rather than go long the banks or AAPL, I grabbed BRK for some look through exposure. Well, the banks did fine and AAPL was probably my most glaring whiff, and BRK during the same period I kicked myself maybe went from $197-$216...

My point if I have one, is that if you're a fan of WFC, buy it, If you're not really a fan of WFC, it shouldn't really effect whether you like BRK. After all, I kind of view one of the benefits to owning BRK is that you're delegating a lot of the decision making to powers greater than oneself. For me, Ive swung heavily from Q1 19 to now, from heavily levered, to raising cash. Putting dollars into BRK continues to allow me to do that while also keeping alive some call options on markets performing.

Spekulatius

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Re: WFC - Wells Fargo
« Reply #1162 on: February 14, 2020, 06:28:18 PM »
WFC is a value trap, it will take years to work out current issues relative to the Account scandal. In the mean time, competition will move ahead of them.  Also note how Munger was flaming the new CEO who can’t even bebothered to move from NYC to WFC’s headquarter. It’s shows lack of commitment.

I think they just had it with WFC.
« Last Edit: February 14, 2020, 08:30:43 PM by Spekulatius »
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LC

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Re: WFC - Wells Fargo
« Reply #1163 on: February 14, 2020, 07:02:17 PM »
Not a value trap IMHO as I dont think there will be terminal decline however it looks like a 3+ year transition period.

But the banks in general dont look so hot as rates approach zero. The institutional banks may fare better as they are not as dependent on consumer banking. Which it looks like WB agrees with as he sells down BAC and WFC but maintains JPM. USBank appears the outlier and I have some theory on it but it is anecdotal: an old colleague was a Sequoia analyst and relayed his meetings with Buffett and WBs belief that USBank was the best managed of (larger) US banks. That may be why he did not sell. Just my 2 cents.
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Rasputin

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Re: WFC - Wells Fargo
« Reply #1164 on: February 14, 2020, 07:27:44 PM »
Brian Moynihan still lives in Boston while running BAC with headquarter in Charlotte, NC

CorpRaider

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Re: WFC - Wells Fargo
« Reply #1165 on: February 14, 2020, 08:40:01 PM »
I think Wells probably has more employees in CLT than San Fran and more employees in CLT than BofA.

Mephistopheles

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Re: WFC - Wells Fargo
« Reply #1166 on: February 15, 2020, 03:17:03 AM »
WFC is a value trap, it will take years to work out current issues relative to the Account scandal. In the mean time, competition will move ahead of them.  Also note how Munger was flaming the new CEO who cant even bebothered to move from NYC to WFCs headquarter. Its shows lack of commitment.

I think they just had it with WFC.

I must have missed Munger flaming the new CEO, what did he say exactly? Ted Weschler spends half his time in Virginia, do you consider that half ass commitment?

Sure Wells has these issues and it will take a few years. If there was no hair the stock would be 50% higher. Btw BofA had immense issues in 2011...

My friend works at WFC in the investment bank. He says the new CEO is doing a top to bottom review of every single business unit in order to streamline. This guy trained under Jamie Dimon, I'm willing to give him a chance, SF or NYC.

They still have the deposits and the branches, they just need to figure out how to make the ingredients work better.

Mephistopheles

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Re: WFC - Wells Fargo
« Reply #1167 on: February 15, 2020, 03:23:57 AM »
This isn't good. Does he think the problems at the bank are permanent? The stock right now reminds me of BAC in 2011. They've got all the infrastructure to be a solid big bank and there aren't that many of them. Bizzarre to me that he's giving up. Just like it was bizzarre that he never built up the JPM stake to 10% of shares out after that first purchase. Never bought back enough BRK stock at 200. Meanwhile $130 billion cash doing nothing and now liquidating WFC at a good valuation when IT is repurchasing 10% of stock per year.

Is the old man losing it??

I agree with your sentiment, but I also dont think WFC going from 10% to 8.xx% is anything to cry over given the other bank exposure in the BRK portfolio. All of which, IMO are of higher quality than WFC, although WFC is probably the cheapest. That said, and Ive long been a critic of Buffett's paralysis the last few years, with the markets behaving wilder than a group of co-eds on spring break, I'm glad Buffett has all of that cash in his portfolio, because I dont in mine. Its a nice little value hedge, which Ive quickly made about a 7% position, up from 0.0% in December.

I don't think they're trying to reduce exposure to banking. I think the Apple position is larger than total of the banking stakes. Would be weird for him to want to reduce exposure.

10 to 8.4% is a pretty big reduction imo.

But as we have concluded on his paralysis, I'm not running to sell my WFC shares just yet.

Agree on BRK being a good hedge.

sleepydragon

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Re: WFC - Wells Fargo
« Reply #1168 on: February 15, 2020, 04:52:09 AM »
Could Web is just doing some year end tax loss harvesting?

rb

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Re: WFC - Wells Fargo
« Reply #1169 on: February 15, 2020, 05:13:01 AM »
I don't think he's got tax losses on this one.