ValuePlays

I’ve said it before and I’ll say it again, is this 2008 or 1990? Wells Fargo (WFC) is doing the little things like it did in 1990 that made shareholders very happy for the next almost two decades.

America’s largest bank-owned insurance brokerage and a subsidiary of Wells Fargo & Company (WFC) – announced that it has acquired the assets of Spokane, Washington’s Char Clark Associates, Inc. The acquisition adds to Wells Fargo’s diversified presence in Washington State – now a total of 4,300 team members across the region, serving customers from 147 banking stores and 5 insurance brokerage offices.

Founded 24 years ago, Char Clark Associates provides group and individual health, life, disability, dental and vision coverages – focusing on the employee and executive benefit needs of customers ranging in size from one to several hundred employees.

Company shareholder Charlaine “Char” Clark and her team will transition operations into the Wells Fargo Insurance Services office in Spokane, WA. Terms of the transaction were not disclosed.

“We are excited to offer expanded resources, services and support to Char Clark & Associates’ customers,” said Mark Neupert, managing director of Wells Fargo Insurance Services’ Spokane office. “Char is well known and highly respected in the local business community and in our broader marketplace and she and her team will be a tremendous addition to our growing operations here in Eastern Washington and across the entire Pacific Northwest.”

“We’re delighted to join such a well respected organization that lets us broaden and enhance the products, services and solutions we deliver to our customers,” said Char Clark. “Our customers will receive the same great service from the same committed professionals, and they’ll now have access to a wider range of resources and services to help them succeed financially.”

“We’ve grown to become one of America’s largest insurance brokerage companies by combining our national resources with great local agencies like Char Clark Associates, Inc.,” said Dave Zuercher, president, chairman and CEO of Wells Fargo Insurance Services. “We’ll continue to look for agency acquisitions that advance and strengthen our vision, values and geographic interests across the country.”

CEO John Stumpf said recently that he wanted to expend the company’s insurance operations and its footprint in the Northwest. This deal does both.

At a time where other banks like Citi (C), Wachovia (WB) and others are shedding (or trying to) assets at a breakneck pace, Wells Fargo is quietly expanding its business and growing stronger.

It worked before, no reason to expect it won’t again…

Disclosure (“none” means no position):Long WFC, C, WB
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Lead, Thank you, Annello, “moral hazard”

– Jane Genova “moving on up” at Point of Law

– Thank you for the mention and your additional work.

– Annello take on the MSM and points out what they do not see

– “The Job of Federal Reserve of the is to create Moral Hazard”

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For those who missed it… best line (there were many)? “Do you know the difference between a hockey mom and a pitbull? Lipstick”. The speech drew 37 plus million people, only 1 million less than Obama’s. Wanna bet that had million of people in Louisiana, Mississippi and East Texas not be displaced due to the hurricane , she would have easily beat him? I think so too.

Part 1:

Part 2

Part 3

Part 4

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Palin, Natural Gas, Biden / Obama, “Mojave

– An actually solution to oil companies that is helpful

– Think really does make sense

– Let’s get on the same page boys

– What’s in a name

Disclosure (“none” means no position):
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Check out this video. I am not a huge fan of his show, but Donny Deutsch really does make some great points about voters.

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Blackmail, Thain, Snow, iPhone

– “They made me do it”? classic

– This makes one

– Once summer is over, let it snow

– A real blow for its business use

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With the current price roughly 25% of its high, it is time to put oil back on the radar screen.

Watch what Boone Pickens has to say.

I sold my USO position in May for $106.85, a 140% gain in 16 months (purchased for $44 in Jan. 2007). It now sots at $89, 16% below the sale price.

Buy now? No.

The global economy by almost every measure is slowing. Will it be a “global recession”? No. The pace of expansion will just slow. That will relieve some demand stress on the whole equation. The US economy, the main consumer of oil looks as though it will muddle through 2009.

With that being said, the supply / demand equation for oil, tilted to the demand side for the last year, ought to begin to stabilize. As it does, interest in the commodity will wane as easy profits will diminish. As it does, the price of oil (barring any significant geopolitical event) will slide with it.

How far? Under $100 or another 7% to 10% lower. Long term, the demand for oil will rise, significantly. Any temporary demand reduction from China or India is just that, temporary. The US will wake from its current snooze and demand at home will grow along with it.

What could offset this? A cellulose ethanol breakthrough that could quadruple US ethanol production almost overnight and displace 900 million barrel of oil demand for gasoline. That essentially equates to 90 days of oil imports becoming unnecessary.

Natural gas. Should actually go it it (it is right off our coasts) we could use it to power vehicles. It would be cheaper than oil, reduce exports and be cleaner.

Here is the thing. either of those two events are at least a year off in the case of ethanol and probably almost a decade for natural gas. That means China, India and a resurgent US demand rule the equation until then. That means higher prices..

It may take a while and you may have to weather a hurricane or two that will pump a temporary rise in prices but I think if you are patient, you will be able to pickup the USO and the price equivalent of crude under $100.

Disclosure (“none” means no position):None
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Nassim Nicholas Taleb, if you read his book “The Black Swan” ought to change the filter you look at life through.

I do recommend reading Taleb’s prior effort, “Fooled By Randomness”. You can purchase it below. I think reading it first is helpful, though not necessary.

Now, onto “Black Swan”:

Taleb argues that “Black Swans”, or drastic events (to simplify it) are both unavoidable and unpredictable in life. Whether they be an assassination, accident, weather event, geopolitical event, terrorist etc., the world we live in cannot be predicted with any accuracy, save for the fact these events will happen. Again, the “when” is unpredictable.

There will be those who predict these events, but Taleb compares these to the broken clock is that is still right twice a day. There is always someone who predicts an event, it is just never the same someone.

What Taleb does is change the filter you see information through. For instance, value investors see a stock drop and think, “hmmm, let’s look closer”, growth investors see the same price action and think “run away”. Same situation, different filters (I know the above comparison is overly simplistic but I hope the basic point is made).

Taleb will change the filter of “risk” you have AND, more importantly, alter the way you look at those who predict macro events. The argument can be made, successfully, I might add, that predicting GDP or the Fed. Budget more than 6 months out is an effort in futility. Taleb argues that investing and relying on these predictions is a recipe for disaster.

For instance, a nuclear reactor melting down in Iran, shutting its oil fields would be a “Black Swan event that would throw every economic prediction made in the last two year out the window, not only for the US, but the world. Taleb says that events like that, on various scales happen all the time and make long range predictions is useless.

This was one of those books you look back on after reading and just say…..”wow”.

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