Even then, I think the Norwest philosophy and the retail thinking of CEO Richard Kovacevich are going to do great things for Wells Fargo. Just as the Charlotte banks grew within a certain milieu, that being the regional banking compacts that protected them from larger interstate acquirers from outside their territory, I think the competitive customer service environment in the upper Midwest shaped Norwest and First Bank Systems, now Wells Fargo and U.S. Bancorp. Given that these are still retail customer service organizations, you have to give some regard to these companies, especially U.S. Bancorp, which provides the good retail experience with ridiculously low overhead and great net interest margins. Still, though, when you annuitize its current earnings at an equity rate of return, the extra you pay for assumed growth opportunities is large. Its taste is not loved around the world.
Some people hate it.
And confections in this country is not a fast-growth business, though a company can, of course, outgrow the industry when it can come up with a number of hits. Just because some of the huge consumer brand name companies are near their lows doesn't automatically make them cheap. At their lows, you still need to test your assumptions about the price you're paying for prospective returns. I personally believe companies like Coke or Hershey are priced like 5-year government bonds, the market is so sure of their staying power and blue chip status. The economy is doing well, sure, but those are big numbers.