JULIA LA ROCHE 00:00
Norman Bergman he asked, why is Berkshire Hathaway selling shares of Wells Fargo as quickly as one can and the Daily Journal hasn't sold one share? If it’s not good enough for Berkshire, shouldn’t we have the same standards?
CHARLIE MUNGER 00:20
Well, I don’t think it’s required that we be exactly the same on everything. We have different tax considerations.
There’s no question about the fact that Wells Fargo has disappointed long-term investors like Berkshire because the old management — which is now removed — were not consciously malevolent or thieving but they had terrible judgment in having a culture of cross-selling where the incentives on the poorly paid employees were too great to sell stuff that customers didn’t really need.
And when the evidence came in that the system wasn’t working very well because some of the employees were cheating some of the customers, they came down hard on the customers instead of changing the system. That was a big error in judgment. And, of course, it’s regrettable.
So, you can understand why Warren got disenchanted with Wells Fargo. I think I’m a little more lenient. I expect less out of bankers than he does.