Warren Buffett：Berkshire Hathaway 1990 Letter, Additional Excerpt 2

None of these eventualities can be ruled out. The probability of the first two occurring, however, is low and even a meaningful drop in real estate values is unlikely to cause major problems for well-managed institutions. Consider some mathematics: Wells Fargo currently earns well over $1 billion pre-tax annually after expensing more than $300 million for loan losses. If 10% of all $48 billion of the bank's loans - not just its real estate loans - were hit by problems in 1991, and these produced losses (including foregone interest) averaging 30% of principal, the company would roughly break even.

Source： https://www.berkshirehathaway.com/letters/1990.html
Locator：1990 Chairman's Letter, additional excerpt 2 · Verified：2026-10-19 · Verification：Short excerpt

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