People have often marvelled that Warren Buffett comes from the Midwest, as if he succeeded despite his location. Recent study of mine seems to indicate that he succeeded because of his location, or at least the culture he came from.
During the past several years, I have struggled to find a bank to invest in. As the 80s and the 90s and the new century showed banks to supremely outperform all other investments, I looked for a way to get on the train. Fortunately, it never slowed long enough for me to hop on board.
But two banks stood out above the rest: Wells Fargo (WFC) and U.S. Bancorp (USB). So I was quite surprised to learn that both had the same genesis. During the prosperous 1920s, the nation's farmers did not share in the good times. Many banks that had overextended credit to farmers ran into serious trouble. In the Upper Midwest, 1,500 banks became insolvent. With this backdrop, just months before the stock market crash of 1929, two banking associations were formed in Minneapolis/St. Paul, Minnesota: Northwest Bancorporation - later known as Wells Fargo, and the First Bank Stock - later known as U.S. Bancorp.
As someone who grew up in the Upper Midwest, I can testify to its conservative and pragmatic culture. Like other areas in my life, distance and time have enabled me to see the merits of boring.
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