v3 Chapter 893： The core of the future Polaris consortium (2 (1/2)

Xia Yu first opened the first folder and browsed.

In addition to the basic situation of Polaris Capital, it is the operating situation of the company it invests in.

Genentech, Amgen, Home Depot, Abbott... all companies have the same situation. Each company has its first quarter and second quarter financial reports, and its operating conditions are clear at a glance.

It's just that because most companies are in the early stages of development, the financial reports are not eye-catching, and even have been input and output, but Xia Yu doesn't care, as long as he sees the money is spent on the ground.

After browsing, the situation of Polaris Capital was updated in his mind, and overall no problems were found.

Xia Yu, who was relieved, closed the first folder and put it aside, and turned over the second folder.

I took a closer look and found that the first four pages were all directories. Looking at the serial number, there were 87 banks listed. No wonder I opened the folder and found that the files inside were so thick.

If you think about it, it has been less than two days since Xia Yu called Peter Lynch when he was about to come to San Francisco in New York to do this work. This efficiency is too efficient.

If you do well, you must praise, Xia Yu couldn't help but admire: ”Peter, your work is very efficient and you did a good job!”

Peter Lynch smiled and said: ”Boss, I have been paying attention to the banking industry before. Especially in the first half of this year, the interest rate fluctuation of the banking industry reached the highest in the past ten years, so I have long been asking people to collect information about the banking industry. Whether there is an investment opportunity, after you ordered me, I just found out that these 87 banks are selected targets that have acquisition value in the western United States.”

Xia Yu suddenly understood that because of the fluctuations in the exchange rate of the U.S. dollar and the impact of inflation, the history of the United States did indeed have a banking crisis in the early 1980s. Thousands of banks failed, and the core banks of the top ten consortia all failed. The total number of banks in the U.S. dropped sharply from more than 70,000 to more than 50,000, and it took more than a decade to reach more than 70,000 again.

This time the work of collecting intelligence seemed accidental, but it was inevitable.

Xia Yu smiled and said, ”Anyway, you did a good job.”

Peter Lynch smiled and nodded slightly to Xia Yu and said nothing.

Lowering his head again, Xia Yu first browsed the catalog carefully, looking for banks that are still well-known in later generations. According to the historical trajectory, banks that can survive and grow after more than 30 years are definitely the best acquisition targets among these banks. .

Not to mention, when Xia Yu turned to the third page, he saw the name of the bank in the first line and couldn't help his eyes.

WELLSFARGO!

Translated, it's Wells Fargo!

In the later generations, the only AAA-rated bank in the United States, Wells Fargo, once known as the First Bank of the Universe, has alternated with China ICBC on the throne of the First Bank of the Universe four times!

Although it was surpassed later, it is still one of the four major U.S. banks, with a market value of around 200 billion U.S. dollars, and even close to 300 billion U.S. dollars at high times!

The four major American banks in later generations were the Bank, Bank of America, Wells Fargo and Citibank Group.

Of course the bank is. Morgan and Chase Manhattan Bank merged in 2000. Before the merger, the two were the financial cores of the Morgan Consortium and the Rockefeller Consortium, respectively.

The later Bank of America did not change its name at this time. It was also called Bank of America. It was the largest bank in the United States and the second largest in the world, and the financial core of the California consortium.

Not to mention the Citibank Group, the core of the first Citibank Consortium, the second largest bank in the United States and the third largest bank in the world.

Therefore, the only opportunity among the four major US banks is Wells Fargo.

Although there are still dozens of bank names in the catalog, but Xia Yu didn't even bother to read it at this time. No matter how brilliant the future is, can it be more brilliant than Wells Fargo?

Since Peter Lynch included the information, it proves that Wells Fargo has a relatively large acquisition possibility. Even if Xia Yu knew that Wells Fargo should belong to a California consortium, there was a sense of expectation in his heart.

With expectations, Xia Yu turned to the location of Wells Fargo Bank according to the page number and read it carefully.

Wells Fargo Bank, founded in 1852, is headquartered in San Francisco...

Because he cared, Xia Yu watched it very carefully. There were ten aspects of the content. After watching it for nearly twenty minutes, he had a clear idea of ​​the Wells Fargo Bank at this time.

At this time, Wells Fargo was indeed only a medium-sized bank, and its activities were basically in California, and 60% were in southern California.

Moreover, Wells Fargo’s main business is very distinctive. It is a community bank. It can be said that it is dedicated to retail. The business of community banks accounts for more than 80% of Wells Fargo Bank. Most of Wells Fargo’s savings come from community retail accounts. The cooperation of large enterprises is more based on loans.

Because Wells Fargo has not yet been listed, the information is not easy to collect. The most representative of the data is Wells Fargo’s 1979 financial report.

The annual report shows that as of December 1979, Wells Fargo’s total assets were 21.4 billion U.S. dollars, and the total loan amount was 15.6 billion U.S. dollars, of which personal housing mortgage loans were 4 billion U.S. dollars.

Although Wells Fargo has total assets of US$21.4 billion, it is an out-and-out medium-sized bank in the United States, where the financial industry is developed. The equity of Wells Fargo Bank is only US$830 million.

Owner’s equity can be considered as net assets, because in accounting, owner’s equity refers to the ownership of the company’s net assets by corporate investors. This includes the capital invested by corporate investors, as well as the capital reserve, surplus reserve and undistributed profits formed in the business activities of the company. It is the source of corporate assets, and the relationship is expressed by the formula: assets = liabilities + owner's equity.

So don’t look at Wells Fargo’s total assets of 21.4 billion U.S. dollars, but that money belongs to the depositors, and Wells Fargo is only escrow.

For the entire year of 1979, Wells Fargo’s net profit was 130 million U.S. dollars.

The U.S. financial industry is currently in a recession. None of the top ten companies in the U.S. is a financial company. The current general P/E ratio of the banking industry is around five, which is still less than the P/E ratio of about ten times that of later generations.

According to the universal price-earnings ratio of five times, the market value of the unlisted Wells Fargo Bank should be 650 million US dollars, which is lower than the net assets of Wells Fargo Bank.

This sounds undoubtedly outrageous, but it is true now, whether it is Bank of America or Citibank, it is almost the same, and the market value is just over 10 billion US dollars.

The financial downturn has been dragged down by the overall environment and has a certain relationship with the global oil crisis. Currently, five of the top ten companies in the United States are oil companies.

Having said that, this year because of the overall environment, inflation in the United States has been quite serious, which has caused drastic fluctuations in the federal funds rate, which has caused a series of bad results.