I can’t help but laugh and shake my head when I read that analysts complain about what they consider to be
the opaque culture of Wells [Fargo], which has a history of limited disclosures. Analysts had long complained that the San Francisco bank didn’t hold live quarterly earnings conference calls. Instead, [company executives] prerecorded statements. . . .
Let’s step out of the weeds for a moment, shall we? I enjoy reading conference call transcripts as much as anyone. But if you think that conducting quarterly earnings calls is the sine qua non of corporate transparency, you really ought to be in a different line of work. More than anything, the calls are an occasion for sell-side analysts to either a) do some extended telephonic preening in front of their peers, or b) ask dumb questions. I’ve long told bank CEOs that the calls tend to cause more confusion than they clear up. As to Wells Fargo in particular, the company is a model of clarity among the big banks simply because its business is more focused and easier to understand than anyone else’s. Or, to put it another way, if you’re a bank investor, which company do you think is more likely to provide, out of the blue, a stock-imploding surprise piece of bad news: Wells Fargo or Citigroup? Citi’s quarterly conference calls, I hasten to add, are reliably lengthy and meticulous. Take your time in answering the question. . . .
What do you think? Let me know!