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Wells Fargo CEO John Stumpf Is Banker of the Year | Where the Money Is - 11/21/13 | The Motley Fool — Transcript

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0:01Fanny May gets a White House Heisman and
0:03John stump is Banker of the year you're
0:05in the right place folks because this is
0:07where the money
0:08[Music]
0:11is welcome to the show it is Thursday I
0:14am Matt copen heer this is David Hansen
0:17David I saw a headline That Celebrity
0:20psychic Sylvia Brown has died 7 77 years
0:24old in her honor who's syia Brown
0:28celebrity psychic come on is she the one
0:30who used to be on those TV ads or
0:31something or the TV commercials I don't
0:33know who this is well look in her honor
0:36even though you know because you don't
0:38know who she is in her honor what is
0:40your psychic prediction for
0:442014 2014 doesn't have to be stock
0:47related anything that you will set your
0:51personal record in a marathon wow there
0:54you go looking out for you I I like that
0:56prediction support there you go I like
0:57that prediction all right uh moving on
1:00to the the real headlines we've got Wall
1:02Street Journal saying the White House
1:05rejects Fanny Freddy recapitalization
1:09plans David last week you saw Bruce
1:12burkowitz put up on his fair home funds
1:15website a plan to recapitalize Fanny and
1:18Freddy essentially pull out the
1:20operating business give that to private
1:23investors who own the basically the
1:25owners of the preferred stock right now
1:27the fanny and Freddy preferred stock and
1:29have that be once again that operating
1:31business be a private business take it
1:33out of the government's hands take away
1:35the implicit government he's saying take
1:37away the implicant government guarantee
1:39and rename it and the government says no
1:43way Jose what's what's what what is the
1:47takeaway here what is the takeaway here
1:48for investors well the takeaway is that
1:52the reason the reason that they said in
1:55the article was that this doesn't get
1:56rid of the fact that these two would
1:58still be the most dominant players in
2:00the space it still creates a duopoly
2:02with these two and new entrance wouldn't
2:04be able to come into the market so they
2:05say that's the biggest deal here but I
2:07think the bigger deal is that the
2:08government would no longer be getting
2:11all of the profits from these two
2:12entities which continues to be the key
2:15here is that the government is making a
2:16lot of money off Fanny and Freddy this
2:19you think that this is government greed
2:20you think that this is plain old
2:21government greed they want the money
2:24well it is a little bit of of greed but
2:27taxpayers were also the ones that bailed
2:28out these institutions so they're
2:30somewhat entitled to the profits here
2:33without the government stepping in there
2:34wouldn't be anything here potentially so
2:37they took all the risk so bur said that
2:39there'll be something that'll come out
2:41of the uh the Legacy portfolio right
2:44it's not surprising that this this plan
2:45got turned down obviously burkwitz and
2:47team are going to put a plan in front
2:50that turns out pretty good for them
2:51right I mean why wouldn't they but it's
2:53probably going to be the start of maybe
2:55some negotiations maybe just some talks
2:57throwing out some ideas here so not
2:59surprising that this got turned down do
3:00you think do do you think any of these
3:02plans will go anywhere it's hard to
3:05imagine does this make you want to buy
3:06the preferred shares or the common
3:08shares of Fanny or Freddy does do
3:10doesn't really doesn't really change it
3:12for me I I it's hard for me to imagine
3:14the private group of investors pulling
3:17that much weight and making the changes
3:18if anything I think it's going to have
3:20to come from Congress in something like
3:21the Corker Warner bill I think that's
3:23more likely than private investors
3:24coming in here and saying this is what
3:26we should do and the Corker Warner bill
3:27is not kind to the shares fan for it is
3:30not very unkind so I think that's still
3:32more likely even though that may not be
3:35that likely all righty second headline
3:38of the day from American Banker Wells
3:40Fargos John stump is the 2013 Banker of
3:44the year that is a great picture of John
3:47stump right there I gotta say silver
3:49hair looks good yeah he he looks like he
3:52looks like a successful Banker in that
3:54picture I'm sorry for the listeners who
3:55cannot see that picture you can go on an
3:57American banker and I guess see it and
3:58the the article starts off by saying he
4:00made $23 Million last year but he still
4:02sits in an office no wonder he looks so
4:03good yes but he still sits in an office
4:05there's stuffing coming out of his chair
4:07they said hey would you ever think about
4:09relocating to New York and build a fancy
4:11Little Empire for yourself there and he
4:12said n it's not for us we like the
4:14community banking feel do you agree with
4:17the choice of Banker of year for John
4:18stump I don't think it's a bad choice
4:21see when we look back of course stump
4:24wasn't leading Wells Fargo through the
4:26financial crisis that was uh that was
4:28his predecessor and and I always hate to
4:30try to say his name cuz I usually kovich
4:32kovich yeah I us I usually get it wrong
4:35so I was going to um he was not leading
4:37Wells Fargo through the uh through the
4:39financial crisis but he was there he's
4:42been there he's been helping to run this
4:44to run this Bank the bank that
4:46essentially has set itself apart from
4:48the other four or from the other three
4:51of the largest banks in the US um I
4:53don't think it's a bad pick this follows
4:55La it was last year that was Steven
4:57Steiner at uh hunting the bank shs and
5:00and I thought that that was a great pick
5:01that's obviously on the small smaller
5:03Bank side of things and he's doing some
5:05Innovative neat stuff at
5:07Huntington yeah I think this is a good
5:09pick yeah and I think it's people always
5:12forget that stump wasn't he's been at
5:14Wells Fargo for a long long time but he
5:17didn't come from San Francisco Wells
5:18Fargo he was part of Norwest and that
5:20merger so he's really a Norwest guy and
5:23he's talking about the culture of Wells
5:24Fargo and trying to keep that culture
5:26there he's really referring more to the
5:28culture of Norwest kind of Midwestern
5:30Minnesota Bank but if you go back to the
5:33time of the merger and the size of Wells
5:34Fargo the size of Norwest you're you're
5:36really talking when those two come
5:38together you're really creating a an
5:41entirely but it's interesting that he's
5:44he's from this bank that no one ever
5:45talks about anymore but that's really
5:47the culture that's still there with
5:48Wells Fargo in addition to the West
5:50Coast how long before Jamie Diamond gets
5:51a crack Banker of the Year oh man I
5:54think I think his runs over I think that
5:55that was a uh it's a rhetorical question
5:58right third headline of the day this is
6:00Forbes meet the Assassin Market Creator
6:04who's crowdfunding murder with Bitcoins
6:07just just think about that headline for
6:09a second assassination Market
6:10crowdfunding murder Bitcoins all in the
6:12same headline that is that's a great
6:15headline that is chalk full of buzzwords
6:18uh this is kind this is a distressing
6:20story and PE our viewers and and
6:23listeners can go ahead can look up the
6:25Forbes article and read that if they
6:26want I I'm not going to I'm not going to
6:28talk about the the the the Alias to the
6:31founder of the site and I'm not even
6:32going to mention the name of the site
6:34because it doesn't really make me feel
6:36good to talk about this sort of thing
6:37but basically what what this site was
6:39set up to do is to allow people to
6:43pledge Bitcoins or donate Bitcoins
6:45whatever you want to call it to in in
6:48the uh to pay somebody for political
6:52assassinations and currently on this
6:54site the largest Bounty is on Ben Bernan
6:57for a little bit more than1 24 Bitcoins
7:01which as of this morning is worth about
7:02$94,000 so you've got people giving
7:05money to this site anonymously
7:07anonymously yeah because because Bitcoin
7:10allows that um and this is this is
7:12exactly the kind of thing for fans of
7:14Bitcoin this should make them Furious
7:17for for guys like the the winkl Vos
7:20twins who we heard speak about Bitcoin
7:21earlier this year they should be furious
7:23about things like this because this is
7:25exactly why uh people are going to be uh
7:29Reg Regulators law enforcement are going
7:31to continue to be um keep that want to
7:34keep their distance from Bitcoin because
7:36of stuff like this because of the
7:37anonymity um on maybe a little bit
7:40funnier side of it The Wall Street
7:42Journal had an article today virtual
7:44currency craze spawns Bitcoin
7:46wannabes and in a little passage from
7:49there it said a cryptocurrency craze has
7:51spawned more than 80 entrance from Pure
7:53coin and namecoin to worldcoin and hobo
7:57nickels in October and November alone
7:59developers launch gridcoin Firefly coin
8:02and Zeus coin I mean between these two
8:05David are we going to look back in a
8:08couple years and and see Bitcoin is that
8:10that it was just a joke and that it was
8:12a fad or is this really something taking
8:15off I'm not going to give you a straight
8:16answer there because I don't know I
8:17don't know the the right answer is I
8:19know you're a fan of Bitcoin you're
8:21you're a closet fan of Bitcoin maybe I
8:24like some parts of it but when you look
8:25at the Bitcoin uh kind of the benefits
8:27of it in terms of being anonymous being
8:29able to securely transfer payments there
8:32the assassination stuff kind of shows
8:34the negative side of that and with all
8:37the positives there's going to be
8:38negatives here and like I've said before
8:40on the show this is going to take a long
8:41long time to be fleshed out from a
8:43security perspective from a legitimacy
8:45perspective which coin which currency
8:48gets kind of the choosing of the masses
8:50here which one will people go with
8:52Bitcoin has the lead now but we had
8:54Morgan hell on the show and he said this
8:56could be as The Economist put it the
8:58Napster of digital currencies how they
9:00kind of started the trend but they
9:02weren't the long-term winners as of now
9:03it looks like Bitcoin be the winners
9:05space of social media exactly but we
9:07don't know what five years is going to
9:09look like but for right now looks like
9:11it's probably going to be Bitcoin we
9:12started the show with you a psychic a
9:14psychic prediction if you were to put
9:16your psychics cap back on five years
9:19from now make a make a prediction one
9:21way or the other it'll still be around
9:23okay moving on to our Focus for today we
9:25spend so much time talking about large
9:28cap companies the the largest companies
9:30the largest banks which makes sense
9:32because they're in the news the most
9:33they have the largest the the the
9:35broadest shareholder base but today
9:37we're looking at small caps and we're
9:40going to each we each picked out two
9:43small cap Financial companies that we
9:46think good investment good company um
9:49and our definition of small cap for this
9:52purpose was a market cap of less than $3
9:55billion David what's the first on your
9:57list first on my list is interactive
10:00brokers and the ticker there is IB KR
10:03and this is a $1.2 billion company so
10:05I'm under your 3 billion threshold there
10:07and this is a lowcost brokerage TDM a
10:11trade E Trade those are also lowcost
10:13brokerages but this is a little bit
10:14different of a model here and some of
10:16our foolish listeners who are kind of
10:18just make a couple trades a year hold
10:20the stocks for fiveyear periods they
10:22probably don't use this interface and
10:24this brokerage this caters much more to
10:26someone who wants to trade products
10:28Equity products Bond they want
10:31currencies uh so this platform allows
10:33you to trade in multiple currencies in
10:36different countries across across
10:37multiple exchanges the commissions are
10:39very very low $1 a trade here um they've
10:42been growing their user base much faster
10:44than the TDM trades than the E trades of
10:46the world which grow their does that
10:47worry you as a foolish investor by the
10:49way that that more people are going to
10:50this somewhat but you can also look at
10:53it the trading across exchanges
10:56countries could be a good thing finding
10:58opportunity across the world there so
11:00they have a much different Focus there
11:02lowc cost provider in the space growing
11:04user base at a over a double digit rate
11:07where the other guys are growing at a
11:08low single digit
11:09rate uh like I said small company the
11:12founder of the company is still involved
11:13he's still the the CEO there he has a
11:15large stake in the company it seems like
11:18it has a good good Runway here so
11:20interactive brokers ibkr would you
11:22rather own interactive brokers or
11:23Goldman
11:25Sachs tough comparison there um I I
11:28personally would probably rather own
11:30Goldman Sachs right now but I certainly
11:32wouldn't mind owning both of them okay
11:33the theme running through both of my
11:35picks is boring they're both they're
11:38both pretty boring they're not they're
11:40not excit they're not particularly
11:41exciting you're not going to win friends
11:43and influence people at cocktail parties
11:45by bringing these up the first of the
11:47two for anybody watching the show
11:49yesterday uh this will sound familiar
11:51Portfolio Recovery Associates this is
11:53one and and I got to give I got to give
11:55credit to a colleague of of ours uh Jim
11:58Gillies who who works on our options
12:00service I worked with him in the past on
12:02our hidden uh hidden gems service he's a
12:04big fan of Portfolio Recovery Associates
12:06and he's actually the one that that put
12:07this in front of me a long long time ago
12:10if I were a wiser person I would have
12:12invested in it when Jim first had this
12:15in front of me but what the company does
12:17is they buy off charged off uh credit
12:20portfolios and they collect on them and
12:24they buy they buy these for pennies on
12:25the dollar and they collect on them for
12:28more than Pennies on the dollar and and
12:29the reason for that is what banks and
12:31and other agencies or or lenders want to
12:33just get rid of them worth it's not
12:36their business so so once once it looks
12:38like this uh consumer is not going to
12:41pay off their debt they just want to get
12:43these uh get these loans get these
12:45portfolios out of there and it's not
12:48their business to go out and make
12:49collections although when when you look
12:51at parts of Bank of America and all the
12:53and all the mortgage mess you could
12:56Wonder but anyway portfolio recovery
12:58soures it's just very good at what it
13:01does they know how to price these
13:02portfolios they know how to collect on
13:04them and they've been racking up great
13:07returns for a long time as a result uh
13:10love the company I the valuation isn't
13:13astonishingly cheap right now but I
13:15think it's viable MH all right is that
13:18it on to my next one on to your next one
13:20all right going this one this is one
13:22that that you put in front of me and I
13:24don't own it but it's one I'm putting on
13:26my radar so you're saying you you stole
13:27this idea stole it from you and you told
13:29me this morning that you were using it
13:31just so I knew that I couldn't use it
13:33yes okay okay continue so I'm going with
13:35green light Capital reinsurance so we're
13:37straight on that we talk about green
13:39light Capital everyone thinks oh David
13:41Ein Horton that's his hedge fund well
13:42this is the reinsurance business that he
13:44is the chairman of and this is a $ 1.1
13:47billion company again under three
13:49billion there and usually reinsurance
13:51companies insurance companies they have
13:53a pretty boring investment style they
13:56buy liquid fixed income products big
13:58treas IES or corporate bonds there this
14:01is not your traditional investment style
14:03their their Investment Portfolio is run
14:06by a hedge fund that is that Einhorn is
14:09a part of and they invest in equities
14:12long short hedge fund here so this is a
14:13much different style of an insurance
14:16company maybe a little bit insurance
14:18company it is not and the company hasn't
14:20been around that long so we don't know a
14:22ton about their underwriting it hasn't
14:25been great in terms of their
14:26underwriting so far but I think they're
14:29incentives are aligned properly we talk
14:30about Marquel how they incent their
14:32Underwriters for long-term underwriting
14:35profitability that's what Greenlight
14:37reinsurance does as well so it's
14:39encouraging haven't seen great results
14:41out of the reinsurance business but it's
14:43encouraging perhaps uh but the
14:45investment style is really what you're
14:46betting on here and it's much of it's
14:49pretty much a jockey play with Einhorn
14:51and you think okay Einhorn he's got his
14:52hedge fund he's got this reinsurance
14:54business does he really care does he
14:56really have skin in the game and the
14:58answer is he does he owns about 177% of
15:01the company here which I did some back
15:03of the envelope math in terms of his his
15:05net worth about 15% of his net worth is
15:07tied up in uh green light reinsurance
15:11here so he has skin in the game he seems
15:13to be involved with the company seems to
15:15care about it um so if you are a David
15:18Einhorn fan I think this is one to put
15:19on your radar and the ticker there is GL
15:21re and part of the reason they're able
15:23to do that with the long short strategy
15:25is in reinsurance you typically have a
15:26longer period before you have to pay out
15:29on the insurance claims so that you you
15:31can potentially move out on the risk
15:33Spectrum in terms of where your
15:35Investments are if you owned neither
15:36would you rather own Greenlight or
15:38Marquel still going with Marquel it
15:40hasn't got the track record there if you
15:42own neither would you rather own
15:43Greenlight or All State I think I would
15:46go with green light there you go all
15:47right my my second one and I and I'll
15:49keep this short because again this is
15:50kind of boring it's very simple Bank of
15:52the Ozarks this is a this is a smaller
15:54Bank uh just really good solid banking I
15:59mean we're talking about growth in uh
16:02growth in deposits over the years uh
16:04when you think about what really can
16:06differentiate a bank it's having a
16:07really strong deposit franch franchise
16:10because uh what ends up happening is
16:13when we're not in an ultra low interest
16:15rate environment like we are today uh
16:18the deposits typically carry or almost
16:21always carry a uh funding cost that's
16:23way way way way way lower than anything
16:25else and in some cases you're not even
16:27paying anything on the deposits so
16:29you're making really nice spreads
16:30between what you can lend out on and uh
16:33and what you're paying on those deposits
16:34what you're paying on your funding costs
16:36on the other side of the spectrum when
16:38you lend the money out you want to make
16:40sure that you get it back which is a
16:42problem that many of the biggest banks
16:44had uh during and following the
16:46financial crisis Bank of the Ozarks has
16:49been very very good about that of course
16:51they saw a little bit of a spike during
16:53the during the financial crisis but
16:54nowhere near kind of the average across
16:57Banks and right now uh about. 3% of
17:01total loans are non-performing go ahead
17:03and check that up against basically any
17:06other bank out there uh Bank of the
17:08Ozarks out way outperforms just about
17:11every Bank on that measure and when you
17:13put that together growing deposits
17:15growing that lowcost funding base uh
17:17making loans that are consistently
17:19getting paid back you end up with
17:21tremendous returns Bank of the Ozarks
17:23has about a 15% return on Equity right
17:26now uh that uh that blows most banks out
17:29of the water as well problem is that
17:32it's not a secret how good this bank is
17:34so the current uh price to tangible Book
17:36value is 3.2 times that's pretty
17:39expensive and I I don't know whether
17:41that's really buyable but it's maybe
17:44worth sort of a an entry position or or
17:47a kind of a tracking position in it and
17:49then buy buy more if uh the market does
17:52something stupid um you could also maybe
17:55just keep it on your watch list and and
17:57see whether you can get a better price
17:58and the ticker o z RK there you go and
18:01portfolio recovery I don't think I
18:02mentioned that one p r a a there you go
18:05emails we have an email address for the
18:07show it's wtmi f.com we love to hear
18:09from readers we love to hear questions
18:11we love to hear
18:12comments just don't insult my bow TI
18:15it's wtmi fool.com our question for
18:18today this is from Nate he says I can't
18:20help but notice you guys talk a lot
18:22about JP Morgan this got me thinking how
18:24does JP Morgan stack up against the S&P
18:26500 as tracked by Vanguard mutual fund
18:30vfinx since 1987 now past performance
18:33isn't indicative of future performance
18:35but over that long period I think it's a
18:38really good measuring stick anyways as
18:40you can see below JP Morgan has slightly
18:42underperformed the vfinx over that time
18:44period so I have to ask you guys can you
18:47please stop spending so much time on a
18:50stock that hasn't even outperformed the
18:53broad Market wah uh Nate's numbers show
18:57that on an annualized basis the Vanguard
19:00S&P 500 Index has returned
19:029.25% per year and JP Morgan
19:089.24% so literally just a hair below the
19:11broader Market David are we spending too
19:15much time with JP Morgan maybe a little
19:18bit but we we'd like to keep our
19:20listeners in the know with what's going
19:21on if they own JP Morgan stock we like
19:23to keep them updated what's going on
19:24with the lawsuits what's going on with
19:26diamond so we talk about that from from
19:28because of that because it's in the news
19:30and we want people to be informed with
19:31what's going on but you he mentions 1987
19:36and like he said past performance not
19:39indicative of future results here and
19:41we're looking at we're often talking
19:43about the stock today what does the
19:44stock look like today what are the
19:45returns potential for the next 5 to 10
19:48years so I see what he's saying but it's
19:52not that quite of a clear of comparison
19:54say oh just because it's been flat with
19:56the market we shouldn't talk about it I
19:58yeah you're right on on the news
19:59perspective we we want to keep people up
20:01to date on what's going on in the news
20:02and obviously the JP Morgan stories are
20:04pretty big stories uh JP Morgan stock
20:07has moved up just slightly since from
20:09when Nate ran his numbers and actually
20:12JP Morgan stock NOW is outperforming the
20:15the S&P 500 by by a slight slight margin
20:18but it's It's Tricky when you when you
20:20look at a a time period like that
20:22because the starting point that you
20:23choose can be relatively arbitrary and
20:26in this in in this case I think he chose
20:271987 because that's as far back as the
20:30vfinx data goes if you chose the
20:32beginning of January 1996 I chose that I
20:35promise completely at random if you
20:37chose January 1996 the annualized
20:40performance of the S&P 500 as tracked by
20:42the vfinx 7.9% versus 99.2% for JP
20:46Morgan so it solidly outperformed the
20:49broader Market over that period but I
20:51think even more importantly here here's
20:53here's a few points the business is much
20:56different than it was back then in 20
20:582004 JP Morgan merged with bank one that
21:02was a gigantic merger and it it it
21:04changed the business in very very big
21:06ways you obviously have different
21:08leadership here uh Jamie Diamond came
21:10over with bank one and he's the CEO of
21:12the company now so comparing between
21:14even the early 2000s and now you've got
21:17big big differences in what JP Morgan is
21:20as a business finally if you think about
21:22valuation if we look at the valuation
21:24multiples on JP Morgan stock today you
21:27have to go back to the early 1990s to
21:30find a time when JP Morgan stock was
21:32trading at multiples that are similar to
21:34today's so essentially what you're doing
21:35is you're comparing price performance
21:38over a period that ends with if not
21:41historically low uh price multiples than
21:45just extremely low price multiples given
21:47JP Morgan's history um and and again
21:49we're forward-looking so we're we're
21:51looking at what JP Morgan stock can do
21:54and when you take those low multiples
21:55when you take the change in the business
21:58I think there's a lot to like going
21:59forward obviously Nate doesn't agree
22:02we'll try not to focus so much on JP
22:04Morgan but it is one of my favorite
22:06Investments right now all right I'm
22:09sticking with it game for the day we got
22:11a little full in the blank here it looks
22:13like we're I don't know how we're
22:14running low on time already but let's
22:16let's nail this one all right the first
22:18fool in the blank is if all banks were
22:20priced at one times tangible Book value
22:23blank would be my first buy full in the
22:25blank I've got I've got three it's so
22:27hard to it's so hard to choose I've got
22:30Bank of the Ozarks which I just uh
22:32mentioned just earlier US bankcorp Bank
22:35of Hawaii those will be right up there
22:37at the top of my list if you're going to
22:38make me choose one I'm going to go us
22:40Bor we got to stop spending so much time
22:42together this is getting lit dickas I I
22:44had two as well I had US Bank or was my
22:46number one just because the returns are
22:48virtually unmatched when you look at on
22:50returns on Equity return on assets over
22:51the last decades but my sleeper was Bank
22:55of Hawaii which is it's in the last
22:59several years here from Return
23:00perspective valuation a little rich but
23:02if it was at one times I'd be all over
23:04both of them all right let's go on to
23:05the second one the second fool in the
23:06blank blank is one Burkshire held stock
23:09I'm staying away from David fool in that
23:11blank this is a stock that Burkshire
23:13holds this is a stock that you hold and
23:15I'm not holding it
23:17Walmart not a not a huge fan of Walmart
23:20for someone in my position when we talk
23:21about Walmart's not a huge fan of you
23:23David we talk about if a stock is a buy
23:25today something that our colleague
23:27Morgan how was very passionate about is
23:29for who what what type of investor is
23:30that a stock or bu a buy or a sell for
23:33for me as a young investor with a lot of
23:34years in front of me I don't get too
23:36excited about holding a Walmart trading
23:38at 15 times earnings not giving me a
23:40huge dividend here I think it's a stable
23:42stock for someone that's older in
23:44retirement that's great but for me what
23:46are you saying about me maybe you but
23:48for me I'm not interested in Walmart
23:50well I'm going to return the favor my
23:52stock that I that I'm not taking out of
23:54the Burkshire portfolio American Express
23:57hey it's it's a fine business it's
23:59whatever I I like American Express at a
24:02at a great valuation I would own
24:04American Express I don't think it's a
24:05viable valuation today and frankly
24:08combine that with the fact that uh there
24:11are other credit card based companies
24:13that I'd rather own American Express not
24:15for me even though Buffett loves it and
24:18I love it I own it yeah I don't care so
24:20there you go all right finishing off
24:22finishing off in the Twitter sphere we
24:24have just one tweet today our Twitter
24:26handle is TMF financials give us some
24:29love on Twitter and we'll answer
24:32questions and put your Tweet up here
24:34this one is from Morgan howel oh yeah
24:35you you get to read the all right he
24:37says Morgan says the only real bubbles
24:38over the last century were stocks in
24:411929 treasuries in the 1960s stocks in
24:4499 housing in '06 each faced decade plus
24:48recoveries Matt false my question is
24:51okay even if you disagree with Morgan
24:53here this is this is my theory everyone
24:56is so hyper obsessed with trying to
24:58predict the next bubble right now
25:00because we all so caught off guard by
25:03the housing bubble I mean everyone was
25:05regardless of what you were think you
25:06were saying in 2006 almost everyone was
25:08caught off guard by the last bubble is
25:10everyone just completely obsessed with
25:12trying to predict the next one so they
25:14can say oh I predicted is that what was
25:15going on here yeah absolutely it's it's
25:17it's a framing it's a backward looking
25:19kind of thing everybody is looking at
25:212008 2009 saying I'm not going to get
25:23fooled like that again we channel the
25:26The Who a little bit there um and and
25:28and so they're trying to predict the
25:29next bubble it's not going to work out
25:31and as long as everybody is focused on
25:33that there's not going to be a bubble
25:35the bubble's going to happen when
25:36everybody's beyond that they're saying
25:37oh bubbles don't happen the market can
25:39go up forever the housing market can go
25:41up forever Bitcoin can go up forever
25:43that's when bubbles happen and Morgan's
25:46also wrong there's a bubble in cupcakes
25:48I hope that pops soon I don't like
25:51cupcak he had he had an earlier tweet to
25:52that we didn't include that he says just
25:53cuz something's overpriced a little bit
25:55or or maybe dramatically doesn't mean
25:57it's a bubble cupcak still a bubble okay
26:01I I can get on board with that a lot of
26:02cupcake shops out there all right uh
26:05again our our Twitter address at TMF
26:07financials our email address wtmi
26:09fool.com and since we haven't mentioned
26:11in a while we do have a free report
26:13available for listeners and viewers all
26:15they have to do email warren.com you'll
26:18get a great report about Warren
26:19Buffett's greatest wisdom that's all we
26:22got David thanks for watching folks I'm
26:24Matt copen heffer this is David Hansen
26:26we'll see you tomorrow
26:28people on the show may have interest in
26:30the stocks they talk about and the mly
26:32fool may have formal recommendations for
26:34or against don't buy or sell stocks
26:37based solely on what you hear

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