Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (34117)	4/11/2009 8:24:55 AM
From: Madharry	Read Replies (1) \| Respond to of 78673

A very bullish biased post from yahoo on wfc. I am also long wfc but not quite as bullish: " Regardless of your opinion over how the rest of the year goes, over what write offs are left, over how much interest rates are helping what we learned is this - and some of us already knew it (including the best investor of all time with 60 years investing experience) - Wells Fargo + Wachovia = tremendous earnings power. It's always wise to be critical and cautious. There are a lot of questions the answers of which will have bearing on this year's earnings. How much will there be left to write off? How much lower might the commercial real estate business go? What is left of the merger related expenses? The long-range picture is much less cloudy though. $20 billion in revenue and $9.2 billion in pre-provision profit in a quarter smack in the middle of one of the worst recessions of the past century. There will be ups/downs in the coming 2-5 quarters but when you look at the big picture the combined earnings power of two top ten banks being run by one of the best management teams in the business is going to be extraordinary. There will be $5b/year in savings from merging the banks assets and employees and improved cross-selling of Wachovia's customers. Plus less competition as other banks have gone out of business or been bought out. We're looking at earnings in the $5-6/share range in a few years growing at 10-15%/year for longer than a decade. This is as close to a guaranteed 10-bagger as there is. You can still buy WFC cheaper than Warren Buffett paid in 1991 and you get Wachovia too - and run by a more competent management team than previously. The best investor of all time gave his opinion already. "I would expect $40 billion a year pre-provision income. And under normal conditions I would expect maybe 10 to $12 billion a year of losses … So, you know, you get to very interesting figures." And he also bought stock in his personal accoutn for the first time in decades. What did he buy? WFC at $22/share. Why would he do that? WEB has made his living betting big when the odds are overwhelmingly in this favor - as they are with WFC. We should do the same. I put 15% of my entire portfolio in WFC at a little under $10/share. I plan to stay in WFC for a decade or longer as it continues to grow and improve its market share. Go long, stay long - and don't "take profits" along the way. You should make 10x your money back within a decade - even with conservative growth figures. " Barrons also came out with a positive article on WFC this week, and Cramer also made positive comments. It wouldnt surprise me to see another quick 20% upward move from these levels, I think a short squeeze here is very likely.