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To us, that speaks to the importance of viewing your partnerships as long-term decisions.With the above being said, let’s move on to the potential future prospects of the business.If, for instance, the same earnings estimates materialize but Wells Fargo shares are trading at the same P/E as today, this would only indicate an annual expected return of roughly 8%. You might believe that another financial crisis is round the bend or perchance the share price could drop 30%, 40% or even 70% next week, next year or next decade – at the very least in your lifetime.However, it does provide a solid baseline for how analysts are presently viewing the company. There are always going to be reasons and times when it was better or worse to own a security.So this, missing out on 10% annualized returns, is the benefit of being “right” about the temporary share price collapse of Wells Fargo.True, Wells Fargo’s share price and earnings dropped by more than 70% in a year.In observing the yearly dividends, it’s clear that a dramatic cut took place.Yet the patient investor still would have seen their dividend grow by over 8% per annum in total.

In reality, it’s actually much more difficult to find a period where shares of Wells Fargo underperformed the index rather than outperformed.Below we have included the Estimated Earnings and Return Calculator to illustrate how analysts are presently viewing this company.Specifically, the calculator uses the consensus median estimates from analysts reporting to S&P Capital IQ for the next four fiscal years along with a long-term growth rate.Consequently, in thinking about the future, it’s important to recognize that fears are often fleeting while long-term business partnership decisions are regularly lasting.Said differently, even if you come up with a classic “bad news” investing story (in this case Wells Fargo in 2009) it’s possible that one’s memory could simply be for Wells Fargo dating back to the end of 1995 – which, incidentally, is about a century and a half after the company started doing business.

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