As we know, Wells Fargo is now Buffett's biggest holding at 15% of portfolio, same as Coke. I was watching that video of Buffett someone just put on here, Buffett is giving his speech for the MBA's and pushing Coke hard, how it was his best idea and that people get 6 best ideas, and usually make most of their money on the top 3. Well based on that WEB feels WFC is now one of his 2 best ideas right now.
WFC today was at $14.23 -4.45 -23.82%
That means WFC is today at about half of Buffett's cost in his BRK portfolio
It also means it is about $10 below his cost in his personal account.
Now one other thing we are reminded when watching the Buffett 2 hours video is how he always has rule number 1: "Do not loose money" in mind in all his asset allocations. He tells us he prefers KO over the long term to PG or MCD... Well I have to assume he now also prefers WFC to PG or MCD. I added some WFC at $18 and will now have to decide if I add some more at $14 tomorrow. Buffett clearly has conviction here and we know he feels he has a margin of safety, but then I read this below : (forget the dividend issue, the "measures of capital strength likely lagged those of rivals" is what concerned me.
Today market watch said: Wells Fargo will have to cut dividend: FBR analyst
WFC 14.23, -4.45, -23.8%) will have to cut its dividend soon to rebuild capital, Friedman, Billings, Ramsay analyst Paul Miller wrote in a note to investors Tuesday. Including recently acquired Wachovia, Wells Fargo's tangible common equity represents 3.6% of tangible assets, while other measures of capital strength likely lagged those of rivals at the end of 2008, Miller estimated. Meanwhile, the bank pays out $5.65 billion in dividends each year and it probably won't earn that much in 2009, the analyst added. "Wells Fargo will have to cut its dividend (if not this quarter, then sometime in 1H09)," he wrote. "The current dividend reduces tangible common equity $5.65 billion annually, and Wells Fargo needs to rebuild its capital ratios." Wells shares fell 13% to $16.27 during afternoon action.
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7bF3241B5D-726C-4D6B-9744-CB2F8CF29857%7d&siteid=yhoof2#comments
WFC today was at $14.23 -4.45 -23.82%
That means WFC is today at about half of Buffett's cost in his BRK portfolio
It also means it is about $10 below his cost in his personal account.
Now one other thing we are reminded when watching the Buffett 2 hours video is how he always has rule number 1: "Do not loose money" in mind in all his asset allocations. He tells us he prefers KO over the long term to PG or MCD... Well I have to assume he now also prefers WFC to PG or MCD. I added some WFC at $18 and will now have to decide if I add some more at $14 tomorrow. Buffett clearly has conviction here and we know he feels he has a margin of safety, but then I read this below : (forget the dividend issue, the "measures of capital strength likely lagged those of rivals" is what concerned me.
Today market watch said: Wells Fargo will have to cut dividend: FBR analyst
WFC 14.23, -4.45, -23.8%) will have to cut its dividend soon to rebuild capital, Friedman, Billings, Ramsay analyst Paul Miller wrote in a note to investors Tuesday. Including recently acquired Wachovia, Wells Fargo's tangible common equity represents 3.6% of tangible assets, while other measures of capital strength likely lagged those of rivals at the end of 2008, Miller estimated. Meanwhile, the bank pays out $5.65 billion in dividends each year and it probably won't earn that much in 2009, the analyst added. "Wells Fargo will have to cut its dividend (if not this quarter, then sometime in 1H09)," he wrote. "The current dividend reduces tangible common equity $5.65 billion annually, and Wells Fargo needs to rebuild its capital ratios." Wells shares fell 13% to $16.27 during afternoon action.
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7bF3241B5D-726C-4D6B-9744-CB2F8CF29857%7d&siteid=yhoof2#comments
