Okay, let’s just forget Cramer uses my Wells Fargo in 1990 analogy from 2 weeks ago in the interview. What is more important is what Stumpf has to say.
There is a commercial break in the middle of the video so do not tune out, there is more after.
Cramer actually said, “I like to challenge my own thesis when I am bullish on a stock because these are just pieces of paper.” Doesn’t that go against everything you are ever taught about investing and buying “pieces of great companies”?
Anyway, on to Stumpf.
Stumpf addresses and I think does a fantastic job refuting Meridith Whitney’s take on the company that it was playing with loan write offs to increase earnings. Stumpf points out that they took a $3 billion charge in Q2 and only $1.5 billion was write-downs ($1.5 billion increased reserves). Had they not changed to way they account for charge-offs, the difference would have been $254 million and covered in the reserves they took.
Best line. “We didn’t miss every bad party but we missed most of them”.
Video:
Wells Fargo’s (WFC) largest shareholder is Warren Buffett’s Berkshire Hathaway (BRK.A)
Disclosure (“none” means no position):Long WFC, None
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