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URL:  http://boards.fool.com/chuck-i-cant-say-my-experience-investing-in-30700433.aspx

Subject:  Re: Wells Fargo (WFC) Date:  5/24/2013  11:39 AM
Author:  kelbon Number:  140 of 604

Chuck,

I can't say my experience investing in banks has been much different than yours, or tens thousands of other people either. For what it's worth I lost enough money with banks to make a difference during the meltdown. With Bank of America, I managed to get out with my original stake intact, but sacrificed years of appreciation. It was ego, empire building, and mismanagement that brought down Bank of America. Though there is a case to be made that in the end they fell on their own sword, and/or were pushed by government. In any case they didn't have their shareholders' well-being in mind. Another bank I owned imploded while I looked on in disbelief.

The one bank I decided to hold believing that it would recover, eventually, was Wells Fargo. Now the stock is making new highs. Wells Fargo's purchase of Wachovia gave me pause, but one of the strong suits of WFC is its management. It seems that they probably made the right "no pain; no gain" call here.

Every generation, or so, there's some kind of real problem with banks of one stripe or another, due to risk-taking and fueled by greed. However, during the long calms between the storms they can be very profitable, and especially so for income investors. History teaches that it can be a high risk activity betting too heavily on go-go financials, but good quality banks can find a place in most people's diversified portfolios, especially if they are dividend-centric. Though, of course there must be hugely successful investors who don't go near "financials."

I'm sure there's many who are shying away from banks because "once bitten; twice shy." This is human nature of course, and the pain and the suddenness of the "bite" is still relatively fresh. However, not all dogs are bad dogs and given some reflection, distance, and active research there's probably no reason to deny oneself the upside of canine companionship.

If you decide to buy Wells Fargo for the portfolio and choose to credit me with the find that's fine. I'm perfectly happy to be known as "kelbon" :) …but, don't blame me if the stock blows up though! (I don't think it will).

kelbon
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