I can think of many financials I'd rather be short or long puts on (and am) than WFC. Still, when they raid the whorehouse, they take the piano player too.
I bet she doesnt disagree that wells is a good company. problem is, it trades at a very rich premium to the group. 2x tangible book value. They got $80b in garbage 2nd mortgages in their books that they are yet to writedown agressively. Tangible book is $35B
I think Buffet bought most of his WFC stake in 1989-1991. It fell to a split adjusted $2 back then. From what I recall from a recent article he sold most of his BAC stake this year and bought more USB and WFC.
Wells has $400b of US loans. they reserved $7b against this. including the $84b in HELOCs(most of which a 2nds). They got tons of exposure to calif
Yeah she got a good call with recent financial mess, but I think she is starting to believe that she is perfect and all knowing. I really doubt Buffet would keep buying wfc stock if he saw risks. I think she wants to stay in the limelight, and making more predictions will help. On another note, aren't we getting close ot the end of the financial mess? I mean with the federal reserve and treasury flooding the world with cash, and force feeding the banks, I really doubt that the large banks will keep falling. In this climate of fear, and warning will be amplified. Whitney, will have had her one hit wonder and disappear next year.