In the history of the United States, every other period such as 20, 30 years, or forty years, ten large commercial Banks and investment Banks will be the qualifying with different, some big bank later greatly downsizing, separation, merger or collapse, have management reasons, but more is the result of Washington and Wall Street struggle, such as Goldman sachs now. 1929 years after the crash, many commercial Banks were forced to give up the very profitable investment banking business. This is the "three kingdoms" should be the sentence in the opening words: "the words, FenJiuBiGe, the whole long clung will points." Most people for Banks, the insurance industry's understanding, as in the understanding of the stock, stock often gives the impression that the risk is very big, black swan always seems to around the head, but the stock is three investment medium and long-term, the highest rate of return, if can reduce the maximum level of smart idea words. Graham in the securities analysis "have a short talk point to the insurance company, he is to use the principle of insurance to understand the stock investment, but it can help us to understand the financial industry, it may soccer jerseys be said of the dot eyeball words. "The above discussion lead us to one conclusion: the principle of common stock investment is likely to be the insurance company of business operation there is close similarities. Insurers to undertake according to practical experience of each Pope risks, and then measure of premium charged. Sometimes, the focus of the analysis focused on so-called" moral hazard ", so we have some real statistical data to measure factors other than a risk. Any can cause far more than the loss of the premium income, but the average results but can be reliably form a commercial profits." Banks also have the same characteristics, a kind of any bad loans may cause a great loss, but the average results but can be reliable form a commercial profits. 
Now on the real estate prices lead to the concerns of the New Deal, the local government financing platform concerns and not associated with the emergence of massive bank non-performing loans and lead to bankruptcy. Buffett in the annual report 1991, on October 1990 additional Wells Fargo (in Wells Fargo before buying part of the drop has been a very detailed explanation, and observe 1991-1997 this time the United States bank shares share price performance, Wells Fargo and not go up the best of the bank. "While you ChuTuo bank shares, but we have the contrarian at $290 million in, less than five times of the PE ratio (pre-tax profit for calculation, it is a price-to-earnings ratio of less than three times even), buy WellsFargo 10% of the shares. WellsFargo is really quite big, par value up to $56 billion, shareholders' equity return rate as high as 20%, asset returns were 1.25%, 10% of the equity is equivalent to buy him to buy a $5 billion of assets 100% equity, but really should have such conditions, the price of the bank may is a us $290 million NHL Jerseys times more......" Many people often feel A shares A "expensive" reason is, often can hear and see the U.S. stock several times p/e ratio, buffett said, interest rates for the stock market is equal to earth's gravity, graham in the securities analysis of the proposed cap on 16 times, it is based on the United States before and after 1933 about 6% of the interest rate.