Thursday, April 9, 2009

My Call on Wells Fargo Stock Was Accurate

On February 25, 2009, Wells Fargo (WFC) stock was selling for $13.44/share. I wrote an article where I praised WFC as undervalued:

At the time, President Obama had said that the government would continue to do whatever it took to support banks. Recently, the government allowed banks to use more flexible accounting to value certain assets.

Today, Wells Fargo stock reported better-than-expected earnings. WFC closed at $19.61/share, a 46% increase.

Personally, I bought Wells Fargo on margin all the way down to the single digits and sold at around $14/share. If I had Warren Buffett's money, I would have held on, but I couldn't handle having so much stock on margin. As it stands, I ended up losing some money on the WFC trades because I started buying shares at around $20/share.

It remains to be seen whether my most recent prediction--that the S&P will go to around 950--will come true. At this time, I continue to believe the S&P will rise to somewhere around 920 to 950.

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