There were always two contradictory ideas I had to carry around in my head when I first started to study investing: (1) bank stocks have a tendency to blow up every generation or two, completely wiping out shareholder equity, and (2) Wells Fargo always found a way to survive these blow-ups and deliver exceptional returns. What’s the magic that seems to make Wells Fargo the superior bank stock investment for those that want to build sizable generational wealth?
You can look at just about any long-term period and the results are staggering. Bought Wells Fargo in 1972, on the eve of a 75% banking sector crisis? You compounded at a rate of 13.5% through the present day and needed to only put $4,000 into Wells Fargo stock to own a million dollars worth of it today. Bought it in 1981? The compounding rate of Wells Fargo stock was 14.7% annually, … Read the rest of this article!