Warren Buffett's connection to Wall Street grows

July 6, 1:59 PMWarren Buffett ExaminerWilliam Freehling

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Warren Buffett's connection to Wall Street is growing, as one of Berkshire Hathaway's largest investment holdings prepares to expand its securities business, according to a report in today's Wall Street Journal.

Wells Fargo & Co., which is one of Berkshire's largest stock holdings, will announce an expansion of Wells Fargo Securities as profitability returns to Wall Street. Wells has typically been known as a conservative bank, an attribute that has attracted Buffett. But now the company will increase the amount of business it does underwriting stocks and bonds, handling mergers and getting involved in fixed-income trading, the Journal reports. The article says that Wells will focus on services for outside clients.

Buffett has often praised Wells for its "plain-vanilla" business. He's said similar things about U.S. Bancorp, another conservative bank that Berkshire has been buying stock in lately. A stagecoach, the symbol of Wells Fargo, pulled up to Berkshire's annual meeting this year before it started and is pictured here.

Though Buffett frequently criticizes Wall Street and is hailed as the "corn-fed capitalist," he's actually more closely tied to "The Street"  than many people think, and that's even more true with Wells' recent decision. Berkshire invested $5 billion in Wall Street giant Goldman Sachs last year. Berkshire also famously invested in bond trading firm Salomon Brothers in the early 1990s. Buffett also occasionally uses derivative trades despite calling them "weapons of mass destruction."

Of course nobody should be expecting Buffett to move from Omaha to New York anytime soon. The derivative trades that Buffett recently undertook don't tie him to the fate of other firms or risk Berkshire's business the way many Wall Street companies did in the past decade. Buffett spent months disentangling himself from the Salomon mess in the early 1990s, as Alice Schroeder describes brilliantly in her autobiography "The Snowball."  And it's likely that Wells will continue to stick to its conservative knitting despite the expanded foray onto Wall Street.

Still, it seems worth noting that for a guy who has an awful lot of negatives to say about Wall Street, Buffett and his company have a pretty big stake in it.