Wells Fargo & Company Message Board
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Why Buffett Sold
Although the topic is considered too risqué by the censors and the previous thread with the same title was deleted, I find Buffett’s decision to sell even that tiny number of shares fascinating. In the aftermath of Lehman’s bankruptcy, he must know what impact his decision would have on the market. Wells Fargo can be said to be his most important holding in many ways because unlike Coca Cola, if properly run, Wells Fargo can be expected to grow EPS year after year like clockwork. So why did he do it?
One of the reasons why I find his decision so interesting is that it comes before the Wachovia transaction was announced. What did Buffett intend to say with this little waggle? More importantly with Wells Fargo’s stock price exhibiting signs of collapse that it had previously avoided on the strength of Buffett’s endorsement, it seems apparent that he must have been selling aggressively because more of the stock now appears to be in weak hands. Why else did WFC not go green on a day when the overall market rallied 5-6%?
I hope the Yahoo! censors will exhibit some common sense and allow this discussion because Buffett’s decision is material. His endorsement of Wells Fargo is perhaps the singular reason why WFC has so far managed to defy gravity despite operating in some of the worst housing markets nationally. Anyone interested in Wells Fargo or like myself who simply wish to study Buffett would do well to learn why he made that mysterious move to sell.-
http://www.latimes.com/news/local/la-me-state-budget-20120515,0,1532582.story
The ballot to raise taxes is in November so nothing can be done until then. Meanwhile, things continue to fall apart. Looks like it is going to be a rough summer. -
http://latimesblogs.latimes.com/california-politics/2012/05/california-budget-jerry-brown.html
I am sure everyone knows this by now. Whether it is cutting spending or raising taxes, it never seems to make any difference. The fiscal hole is always there.
The underlying problem is selective depopulation. As businesses and middle class people like engineers and accountants leave the state, the Californian economy will be like a giant balloon slowing losing air. No sudden pops, just an unrelenting death that leaves an ugly, rubbery mess everywhere.- 1 Reply to mingsphinx
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MingSphincter - you certainly think your analysis is important.
California will do fine, Wells will do fine and a long WFC shareholder will continue to prosper.
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It's an election year and Facebook's IPO has been penciled in for May. So between May and November, we might have an artificially created financial bubble to help certain people get over the election hump and paper over headlines like "Half of new graduates are jobless or underemployed".
There is no telling how high stock prices will go or when they will peak if the manipulators succeed in sparking a frenzy, but it is likely to be your last chance to get out of your position in WFC. To buy and hold, you need to buy stuff that is actually valuable. So long as the real estate markets in California, Florida, Arizona and Nevada remain depressed, WFC is worth nothing. -
http://www.bloomberg.com/news/2012-04-23/new-california-taxes-pay-for-pensions-not-schools.html
It is aggravating enough to read about it. I cannot imagine having to pay for the "unconditionally guaranteed lifetime pensions" of these former government employees. -
You hear that? The never ending beat of cacophonous idiocy has died down and an unseemly silence has settled on the WFC board. If you are unaware of it, abandonment of the board by the moronic trolls, counter-trolls and assorted goblins is a very bad sign. This means that the distribution to retail is complete. It took a number of years but they finally got the fools to line up and swallow hard.
It will not be long before the truth about WFC is revealed. I certainly would not want to wait until the latter half of this year to get rid of any WFC exposure. Because when the elections are over, there would be no more reason to keep up the pretense.- 1 Reply to mingsphinx
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Ming: "The never ending beat of cacophonous idiocy has died down...."
Don't read too much into that. It just means Gus is on a break.
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http://online.wsj.com/article/SB10001424052702304444604577340531861056966.html?mod=hp_opinion
I have been talking about California's middle class exodus for some time. The opinion piece above just adds to the growing alarm at how California is hollowing out. What is surprising is that the article does not even begin to address the devastating economic effects that a middle class flight would have. The article ends up focusing on taxation instead. Is the truth too hard to bear or do they really believe that things will just take care of themselves? -
http://online.wsj.com/article/SB10001424052702304537904577277242682364690.html?mod=WSJ_hpp_MIDDLE_Video_Top
It is not a very good article. I certainly expect more from anyone who is a member of Stanford's faculty. But it is a timely reminder of how broken the political and economic landscape in California is.
Unless you see long-term solutions to California's problems, take advantage of any coming rallies to sell your holdings of WFC. The real deal will emerge after the elections and it will not be pretty.- 2 Replies to mingsphinx
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MingSphincter - you certainly think your analysis is important.
California will do fine, Wells will do fine and a long WFC shareholder will continue to prosper. -
ming, gus says it is because he is a naive dupped shareholder.
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It seems the campaign to get wealthy Californians to throw their money into Wells Fargo did not go as well as planned. The Warren Buffett brand just did not inspire enough to squander their hard earned savings on a worthless investment. The aging guru may be adored by many, but I suspect that most people know to be wary of anyone who is so wildly successful in financial markets.
If Buffett is not enough, then it is Soros who must heave his massive heft into the picture. George Soros too likes Wells Fargo and of course you are expected to be a lemming and follow the great man. The two financial geniuses of our time want you to buy WFC and be the best that you can be. Sacrifice you wealth, health and sanity for the sake of your state and country. My friend, they call for you.- 1 Reply to mingsphinx
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"... did not go as well as planned"
Back from the far east to stop by for a minute? The time away has not sharpened your intelligence any or increased your poor financial knowledge, but what the heck, we have plenty of other clowns posting here so what is one more?
(1) What campaign was that and where did you see it advertised or described?
(2) Assuming there is a campaign, what was its monetary or volume goal, what was achieved and how much did it miss by?
(3) In what years did you outperform Warren, such that you can presume to judge his performance?
TTBP
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http://latimesblogs.latimes.com/california-politics/2011/12/jerry-brown-slashes-spending-california-budget-cuts.html
They keep cutting, and cutting and cutting but the gap never seems to close. The problem is that the Californian economy is broken. If it had not been for the major distortions the NASDAQ and then the real estate bubbles created, we would have known that the Californian economy was flawed in its basic premise long ago. -
thanks for the initial post. I also have been watching Buffet. I have chose to invest in an etf for some protection. I believe banks will be a big part of the recovery, so I am ready to double or add to that postion, but not yet. XLF
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