Buffet Doesn't Approve Of Wells Fargo CEO, Slashes Stake In Bank
Warren Buffett said about Wells Fargo during their CEO search that, "They just have to come from someplace [outside Wells] and they shouldn't come from Wall Street,"
"There are plenty of good people to run it [from the Wall Street banks], but they are automatically going to draw the ire of a significant percentage of the Senate and the US House of Representatives, and that's just not smart," he added.
However, Wells Fargo appointed Charles Scharf (a JPMorgan man before running Visa and BNY Mellon) last year and agreed to let him run it from New York).
"That's outrageous," Charlie Munger, Buffett's right-hand man and Berkshire's vice-chairman.
Berkshire has cut its position by more than 60% this year to fewer than 140 million shares, giving it a roughly 3.3% position in the bank - its smallest percentage stake since 2003. In fact its entirely possible Berkshire exited Wells Fargo entirely last quarter. (Investors will find out when Berkshire's holdings are published in mid-November). Some also speculate that the selling of the Wells position and the CEO hire have nothing to do with each other and point to Berkshire lowering their position in other banks.
On the other hand, Buffett's company loaded up on $2.1 billion of Bank of America stock over 12 straight trading days last quarter, suggesting he isn't bearish on the entire banking sector.