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Wells Fargo & Company Message Board

  • mingsphinx mingsphinx Nov 24, 2008 7:57 AM Flag

    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.

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