You know that scene in Titanic where the orchestra keeps playing while the ship sinks? Yeah. That's pretty much what's happening when you look at Wells Fargo's performance compared to the Nasdaq and realize half of Wall Street is still recommending the stock like it's 2019.
The cold, hard facts
Wells Fargo — the very same bank that got caught fabricating millions of fake accounts in customers' names — is falling behind the Nasdaq in a way that should make any investor scratch their head.
While the Nasdaq, supercharged by big tech and the artificial intelligence craze, follows a trajectory that would make a SpaceX rocket feel embarrassed, Wells Fargo shares are spinning their wheels. We're not talking about one bad month. We're talking about a trend that's been dragging on, one that the big financial media outlets prefer to hide behind paywalls and cookie pop-ups — which, by the way, is exactly what happened with the original source of this story on Yahoo Finance, which instead of delivering useful information, greets you with a wall of "accept our cookies" before showing you a single data point.
What kind of financial journalism model is that, for fuck's sake?
The problem isn't just Wells Fargo. It's the entire sector.
Let's get to what matters. Traditional American banks are living through an existential crisis. The Fed's high interest rates, which in theory should fatten bank margins, brought along a package of problems: rising delinquencies, a depreciated bond portfolio (remember Silicon Valley Bank?), and tighter regulation after the scares of 2023.
Wells Fargo, specifically, still carries the burden of the asset cap — that limit imposed by the Fed in 2018 as punishment for the ghost accounts scandal. To this day. Six years later. The bank operates under an asset ceiling that prevents its growth. It's like playing soccer with one leg tied up.
Meanwhile, Nasdaq companies — Microsoft, Nvidia, Meta, Apple — are swimming in cash, riding the AI wave, and buying back shares like there's no tomorrow.
Comparing Wells Fargo to the Nasdaq is almost unfair. But that's exactly the point.
What nobody tells you
The Brazilian investor looking abroad — and more and more people are doing this, rightfully so — needs to understand something fundamental that Nassim Taleb hammered home until he was blue in the face: don't confuse the institution's name with the quality of the investment.
Wells Fargo is a century-old name. One of the "Big Four" American banks. Warren Buffett was a shareholder for decades. But Buffett himself drastically reduced his position. When the Oracle of Omaha — the guy who has more skin in the game than any LinkedIn analyst — starts jumping ship, maybe you should at least pay attention.
You know what's even more telling? Buffett sold Wells Fargo and increased his position in... tech companies and insurers. The old man isn't stupid.
The "it's cheap" trap
There's always someone who says: "But Wells Fargo has a low P/E, it's cheap!"
You know what else was "cheap"? Kodak in 2010. Blockbuster in 2008. Citigroup in 2007.
A low price without a catalyst for change is just a number going down. As Benjamin Graham — the father of value investing, not some TikToker in skinny jeans — used to say, the market in the short run is a voting machine, but in the long run it's a weighing machine. And the scale is tipping against traditional big banks.
This doesn't mean Wells Fargo is going to collapse. Far from it. But "it won't collapse" is a pretty shitty criterion for choosing where to put your money, don't you think?
The question that matters
If you've got Wells Fargo in your portfolio — or any traditional American big bank — answer me honestly: are you holding because you did an updated fundamental analysis, or because the big name gives you emotional comfort?
Because emotional comfort doesn't pay dividends. And while you sleep soundly with your "solid bank," the Nasdaq keeps eating your returns' breakfast, lunch, and dinner.
Sometimes, the biggest risk isn't investing in something volatile. It's standing still and thinking that stability and mediocrity are the same thing as safety.
