Daily Journal owns a lot of Wells Fargo, can you comment?
Well, of course, Wells Fargo had a glitch. The truth of the matter is that they made a business judgment that was wrong.
They got so caught up in cross-selling and so forth and having tough incentive system that they got the incentive systems so aggressive that some people reacted badly and did things they shouldn’t. And then they used some misjudgment in reacting to the trouble they got in.
I don’t think anything’s fundamentally wrong for the long-pull with Wells Fargo. They made a mistake. It was an easy mistake to make. And the smartest man I ever knew made a similar mistake.
Henry Singleton, who was the smartest single human being I ever knew in my whole life. And Henry Singleton of Teledyne also had very aggressive incentive systems, like Wells Fargo. And his customer in many of his subsidiaries was the government. And of course, it’s not that hard to cheat the government. And with his very aggressive incentive systems, 2 or 3 out of 20 subsidiaries cheated the government. So all of a sudden he’s got three scandals at once. It wasn’t that Henry was trying to cheat the government. It's just that he just got a little aggressive in applying the incentives and he got blindsided.
That can happen to anybody. I don’t regard getting the incentives a little aggressive at Wells Fargo as a mistake. I think the mistake there was, when the bad news came, they didn’t recognize it rightly. They made a mistake.
But you know what happens in a tough system like capitalism, you make a mistake like that and pretty soon you’re gone.
On incentives, you were explaining at Wells Fargo that it might have been a little too aggressive, but you don't have problems with aggressive incentives. Can you expand a little?
Well, how do you know they’re aggressive until they try? They didn’t react enough to the bad news fast enough. And of course that's a very dangerous thing to do.
I don’t think it impairs the future of Wells Fargo. As a matter of fact, they’ll be better for it. You know, the one nice thing about doing something dumb is that you probably won’t do it again.
Not recognizing a mistake rightly, it's the biggest mistake of all time.