Warren Buffett Buys More Wells Fargo

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At the recent Berkshire Hathaway (BRK) shareholder meeting, Warren Buffett said that Wells Fargo (WFC) was so healthy, he’d put his entire net worth into the stock if he could.

Well, he’s not going that far, but he did boost his stake in the bank during Q1:

Bloomberg: Buffett’s firm, the largest shareholder in San Francisco- based Wells Fargo, increased its stake in the bank by about 4.3 per cent in the first quarter to 302.6 million shares, Berkshire said in a regulatory filing yesterday disclosing its U.S. stock portfolio as of March 31. Omaha, Nebraska-based Berkshire increased its holding of U.S. Bancorp (USB) by about 2.2 per cent.

Banks that attract deposits at low rates were undervalued in the first quarter because investors wrongly believed that the entire industry was hobbled by risky bets and reckless lending, Buffett said at Berkshire’s annual meeting earlier this month. The KBW Bank Index fell 37 per cent in the first quarter.

“All banks aren’t alike by a long shot, and in our view Wells Fargo, among the large banks, has some advantages the others do not,” said Buffett, Berkshire’s chief executive officer and chairman, at the company’s May 2 annual meeting.

To some extent, you have to discount the fact that Buffett, like any other mortal, may have an inclination to be talking his book. But you can probably imagine Buffett’s frustration at the government’s mandatory capital injections of the banks following the recent stress test.

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