Dick Bove trolls Warren Buffett on Wells Fargo & Co (NYSE:WFC) see the interview and informal transcript below – first a quote from the interview
Well you know even Einstein the mathematican said that mathematicians will tell you they make mistakes. Warren Buffett simply blew it on this stock he was not watching the company closely the people he had entrusted to give him information on this company. We’re not looking at it closely and therefore some Grievous grievous errors were being made on a constant basis and they never caught.
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Berkshire Hathaway owns nine point four percent of Wells Fargo followed by the second and third largest shareholders Vanguard and State Street. What is it about Wells Fargo stock that keeps these folks believing in it. Are they naive or are they smart? And which direction should you be going? Should you own it or stay away. Well, we thought let's bring in Dick Bove. He's Hilton Capital Management chief strategist the real banking analyst on this planet who joins us now on a Fox Business exclusive. Well well to that interview that I did a year ago Buffett was rather dismissive, and he said No no they're going to be there are going to be breathing so heavily over this company they'll find all of the problems they did not. And yet he's still in the stock. Was he naive smart misguided? Well you know even Einstein the mathematical mathematicians will tell you do make mistakes. Warren Buffett simply blew it on this stock he was not watching the company closely the people he had entrusted to give him information on this company. We're not looking at it closely, and therefore some Grievous grievous errors were being made on a constant basis, and they never caught.
Now the question the second question is a more important one which is what did you do with the stock at the present time. And I think I think that Tim Sloan is going to have books written about him because he's he's doing a miraculous turnaround in this company at the present time. I really think that it's going in the right direction. I really think it is going to be a very successful company for decades to come. So Buffett didn't really blow it. He blew it certainly on believing that there would be no more problems after the one and a half million phony account scandals that they set up that were uncovered by The L.A. Times and it was just it was it was tainting people's credit ruined because they weren't paying interest or whatever fees they owed on these accounts they didn't even know they had. But look at the stock since the scandal tickets up 5 percent. It has taken a dip certainly over the past three months. But so you're saying this is a place to buy. Yeah, I know. In other words, you know the areas that Wells Fargo went way beyond what was the scandal. You know there were problems in the mortgage division. There were problems with auto finance there were problems with credit cards they were problems as you noted with opening deposits there were problems in terms of wealth management. We think so basically there was a breakdown in the culture of the company internally, and that breakdown was due to the fact that it was pushing so hard to increase sales because again this is this is a massive company.
There are only three companies in the United States that made more money than it according to Fortune 500. Dick at what cost. And I say that because now the stuff that was revealed for this 1 billion dollar fine were they charged improper fees for rate lock extensions and mortgage lending. They sold on unwanted insurance to auto insurance auto loan customers. I don't know. I wonder. And Tim Sloan has been there since the 1980s. He's a fine person I am sure he started as a bank teller. I love guys who begin at the very bottom and figure this out and make it all the way to the top. But some believe that you've got to just clean house and do you think that he deserved seventeen point four million last year and a 36 percent raise especially considering now the bank takes a 1 billion dollar hit. You know I think he deserved it so Larry. He's a quarterback for the Tampa Bay Bucs which is not a great team. My favorite team and he was paid twenty-one million last year. Anyway, the point is that he stepped in at a time when the company was an absolute agony, and he did clean house. He did change. You know people on the board of directors he changed people at middle management levels. He started winnowing some of the businesses that the company should in fact sell. He did change the culture. So I think I think he's done a magnificent job. To be honest with you and I think he does deserve his 17 million dollars certainly as a tip of a buck quarterback deserves 21 million.
Yeah but my bank account isn't time to have a new year. Thankfully my bank account isn't tied to my team the Cleveland Browns. We're in the same boat. I know I know who said Cleveland Clowns. Hey, Rick, it's great to see you. Thank you very much.