Why Warren Buffet LOVES The Banks

By BrooklynInvestor

Not to beat a dead horse, but this Wells Fargo situation kept lingering in my mind so I thought I'd make this followup post.  It is well understood by value investors but since I have a pretty wide readership in terms of stock market experience, I thought I'd post this because there is something to be learned from thinking about WFC, Buffett and how the market works. 

• Mr. Market sees a volatile stock.  WFC went from $40/share to below $10/share during the crisis; way too volatile.  A 75% decline is just unacceptable to own for a conservative portfolio.  Of course, Mr. Market is the cause of this volatility.  The volatility just illustrates the manic-depressive nature of the stock market.
• Not only is the stock very volatile, but it has gone nowhere for a long time.