One of Warren Buffett’s most admirable traits was on display this past weekend at the Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) annual meeting in Omaha. Loyal as they come, Buffett and his sidekick, Charlie Munger, continued to support Wells Fargo (NYSE:WFC) stock despite the ongoing lousy press that plagues the bank.

Buffett’s support is excellent news if you own WFC stock, but terrible news if you own stock in Berkshire Hathaway, whose position in WFC stock is its third-largest equity holding. 

While Buffett’s advice is broadly useful, it’s becoming questionable how useful it may be about some of BRK.B stock’s specific holdings when they’re in hot water.

The Ongoing Scandal for WFC Stock

WFC recently stated that the combined legal losses from several of its scandals —  including creating as many as 2 million fake bank accounts — could be as high as $3.1 billion, 41% higher than its estimate in September.  

The bank is currently recruiting a new CEO to replace Tim Sloan, who resigned suddenly in March after taking over from former CEO John Stumpf, who himself resigned in October 2016 after leading WFC down a scandalous path of deceit and deception.    

In the two-and-a-half years since the fake-account scandal first surfaced, Warren Buffett and Charlie Munger have been very supportive of both Wells Fargo and WFC stock.

“It’s a great bank that made a terrible mistake,” Buffett told CNN’s Poppy Harlow in an interview in November 2016. “It was a dumb incentive system, which when they found out it was dumb, they didn’t do anything about it.”

Buffett, of course, is referring to the fake accounts and the company’s ridiculous goal (set by Stumpf) of  selling eight Wells Fargo products per household that banked with WFC.

This past weekend, Buffett didn’t steer too far from his 2016 comments about the bank.

“It looks to me like Wells made some big mistakes in what they incentivized,” Buffett said. “I’ve seen that [at] a lot of places. That clearly existed at Wells. To the extent that they set up fake accounts, a couple of million of them that had no balance in them, that could not possibly have been profitable to Wells.”

Munger said nobody should go to jail for honest errors of judgment and added that he wished Tim Sloan was still in the top job.  

Buffett’s Fine Line

Buffett is walking a fine line between protecting the interests of Berkshire Hathaway shareholders (he is the largest owner of Berkshire stock) and the interests of the American people.

If he says damning things about Wells Fargo, the WFC stock price will tank and he, along with the rest of his shareholders, would lose money, due to BRK.B’s large bet on WFC stock. Yet if he continues to play the role of a hypocrite, defending the practices of a rogue bank stock he happens to own, while discussing other problems that the U.S. faces, investors and others are eventually going to tire of listening to this icon of investing.

And that would be a shame.

However, it’s not the first time that Buffett’s said one thing and done another.

Consider his investment in Kraft Heinz (NASDAQ:KHC). At the company’s annual meeting this weekend, Buffett was highly critical of private equity firms.

“We have seen a number of proposals from private equity funds where the returns are really not calculated in a manner that I would regard as honest,” Buffett said. “If I were running a pension fund, I would be very careful about what was being offered to me.”

He went on to state that he wasn’t going to add debt to Berkshire Hathaway to juice its internal rate of return.

It’s an observation that would be righteous if it weren’t for the fact that Buffett’s in bed with private equity firm 3G Capital. Not only did he invest a whole bunch of money in Kraft Heinz, but he also got involved with Burger King’s merger with Tim Hortons in 2014, which formed Restaurant Brands International (NYSE:QSR).

Care to guess how much debt those two companies have?

QSR had $11.8 billion in long-term debt at the end of March, equaling 70% of its market cap. Kraft Heinz had $30.9 billion in long-term debt at the end of December, representing 78% of its market cap.

So, it seems like he is suggesting to investors, “do as I say, not as I do.”

The Bottom Line on WFC Stock

When Warren Buffett’s gone from this planet, he will be missed, most notably by those who were made very rich by his business acumen.

However,investors will look back on his pledge of allegiance to Wells Fargo and wonder why he remained loyal to that particular bank when there were so many other better ones.

Buffett’s calming words this weekend will continue to do wonders for WFC stock. As for Berkshire Hathaway, it’s merely another reason to ponder whether it’s lost its touch.

At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.