Value Investment Fund – Status on October 31, 2021
During October, the Fund continued to hold Wells Fargo as its only investment. During the month, Wells Fargo improved $5,166 over September’s ending balance, a 10.48% improvement. As stated in other articles related to Wells Fargo, this is a long-term investment tied to the removal of the Federal Reserve penalty now going into its fourth year. This penalty is designed to prevent Wells Fargo from growing beyond its current $1.9 Trillion of assets. In the interim, Wells Fargo has improved the quality of its balance sheet by improving its percentage of non-interest bearing deposits and the quality of loans. Currently, the Fund has set the sale price for this security at $58 per share. Initially, it was hoped that the Federal Reserve restriction would be lifted by year-end 2021, but that is looking unrealistic now. If the restriction is lifted by end of June 2022, the stock should reach the target goal of $58 per share thus generating an estimated $22,950 return on a $40,000 investment basis over a course of approximately 18 months. This equates to an annual return of about 25%.