Is Buying the Dip a Science?
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Hello and welcome to the TLDR podcast, a show about the culture, gossip, and business of money. And this week, the nastiest trade. My name is Devin Friedman. I am here with some of my regular co-hosts and some new folks.

Matt Keres is the director of product for Wealthsimple, our sponsor. Matt, how are you? What are you working on this week? We launched 24-5 trading, which is great. What is 24-5 trading? 24-5, you know, means you can trade stocks 24 hours for five days of the week.

Congratulations, Matthew.

Sarah Rieger is out this week on vacation and filling in for her is her good friend, sometimes editor on the TLDR newsletter, Jared Sullivan. Jared, welcome back to what we call The Big Show. I love getting pulled off the bench. On a weekly basis here at the recording, you can see Jared's face pressed up against the glass looking in on the podcast recording.

Waiting to get off the bench and take Sarah's spot. I would never wish Sarah harm, but when she's out, I am not tearful. And we have a first-time host this week, a friend of the newsletter, Claire Porter Robbins, esteemed and accomplished writer for such outlets as The New Yorker, The Atlantic, and The New Yorker.

And the crown jewel, the TLDR newsletter. Claire, how are you? I'm doing well. I like to call myself the TLDR TikTok correspondent. Ooh, chief TikTok correspondent. I'll take it.

All right, we have an amazing show for you today. We're going to be talking about the taco trade. What is the meat in the taco trade? Is it carne asada? We're going to be talking about FinTalk advice. Is it worth listening to ever? And we're going to be talking about how you too can work for North Korea from the comfort of your own home. And to get there, we are going to start with the question we always start with, a question that lets us get at the most interesting stories about money right now,

Matt Karras, who is making or losing money that's interesting to you? Taco traders are making a killing. It's big. You know, the banks are writing research notes about it, made the cover of the Wall Street Journal. You know, you can't go on TikTok or Twitter without hearing about the taco trade. Matt, can you tell people what the taco trade is? It's so good. The taco trade is an acronym for the Trump always chickens out trade.

So this is a strategy that FT columnist Robert Armstrong popularized over the last couple of months. Basically, you know, after observing that President Trump has this tendency to announce tough policies that push down markets only to backtrack very quickly, causing sharp reversals that, you know, if you had faded that initial move, you could have made a lot of money off of.

Everything from those reciprocal tariffs to threatening to fire Fed Chair Powell to that one weekend long, you know, 50 percent EU tariffs episode last week. All of those were big announcements that markets crumbled in response to. And Trump walked back, leading to a euphoric rally.

Okay, so traders are out there looking for patterns, right? Yeah.

and the market goes back up. I guess, I don't know, do you want to talk about like the news conference? The news conference was hard to miss. I watched it multiple times. Basically, the trade got so much play that the very brave CNBC reporter asked President Trump about the taco trade point blank on Wednesday evening. Mr. President, Wall Street analysts have coined a new term called the taco trade. They're saying Trump always chickens out.

The thing that's fascinating sometimes about watching Trump speak is that you can watch him in real time work through his reactions to find out what he thinks. And at first he's like, what did he think that the reporter said? Not chicken, but... Chicken out. Chicken out.

Oh, isn't that a chicken out? I've never heard that. And then he's like, well, you guys obviously don't understand that, like, this is called negotiation. You set a number, and if you go down, you know, if I set a number at a ridiculous high number, and I go down a little bit, you know, a little bit...

They want me to hold that number. And then eventually coming around to the time-honored Trump response of... But don't ever say what you said. That's a nasty question. The acronym is so good because it's almost designed to perfectly just get under his skin and live with him for the next million years, right? He will never forget it, and it will burn inside of him. Yeah, I hope he does forget it really soon, just for all of our sake. Matt.

Has anyone run the simulations and showed what it would look like had you done the taco trade at every possible turn? You know, I haven't seen that, but like there was really one turn. Like if you called the Liberation Day charade was actually a charade and then you stuck with it through all the other threats.

you would have made a ton of money. You probably could have done a little bit better than this if you called every single turn. But like to put it in context, markets were down 15, 20. Some stocks were down nearly 30 or more percent in early April after Trump announced these massive reciprocal tariffs. And less than a month later, stocks are already above where they were then. To put that in context, like after the global financial crisis, it took four or five years to get out of that drawdown.

In COVID, it took six months, which was like lightning fast. In 2021, it took about two years. And with this tariff worries, it's about a month to get out of it. If you had called that instead of like pissing your pants, then you would have made a lot of money. Jared, be honest here. In a world where you either called it or pissed your pants, which one did you do? I did not panic sell because I've given that advice to our readers, TLDR, a hundred thousand million times about not panic selling. So I did not panic sell. But I also...

fully suspected Trump to drive our economy straight into the ground. I would have to say that on this podcast, the person who's consistently seen how things were going to go is Matt, really. I mean, I

didn't foresee how much chaos he would cause in the markets on a day-to-day basis. But yeah, I have had a view, which sometimes I felt stupid for having, but I've held firm on, which is that, you know, he wants the line to go up. He hasn't really backed down from everything, right? No, there are still tariffs against Canada, Mexico, and China, but not nearly as disruptive as like an 80-90% tariff or something like that, or in the case of China, 130% tariff. So...

Right. It's the difference between shooting yourself in the heart and shooting yourself in the foot. Yeah. I guess the question is, like, does introducing this idea to Trump change the nature of the trade here? I don't know. I think that's the big question. Now that the taco trade has been so popularized and that Trump has been asked about it, it is possible that it is not as good of a bet as it was before. Because?

Because do you think the markets will be less reactive to whatever he's doing? Or because why isn't it going to be as good of a trade? Well, there's sort of two dynamics.

One is that whenever a trade becomes more consensus, it is harder to make money off of because people would be less reactive to any crazy thing that Trump says. And so you have less room to make money if he turns out to backtrack. The other is that there's like a reflexivity thing here, which is that the popularization of this meme actually makes Trump less

feel like he needs to go further and hold firmer to, you know, big, potentially damaging policies like massive tariffs. On the flip side, it also could lead to markets not responding as much. So it's seeming like these things could be fine just because everyone's banking on it not actually happening. Right. And then he doesn't back off until the tariffs are actually so damaging that it starts to show up in the data. Yeah.

So we'll see. That would be like a very unfortunate outcome of what I think is a pretty awesome meme if it actually led to, you know, the downfall of the global economy. You know what they say, when God closes a window, he opens a taco bar. What are you doing? Planning a taco-volution!

Claire Porter Robbins, who is making or losing money that's interesting to you right now? Okay. TikTok creators and specifically FinTalk, finance TikTok creators, are making a lot of money. And who's losing money is some of the people that are just blindly following these tips. Right. So we've dipped our toe in these waters before. Sarah did a segment about some of the weird advice that she found on TikTok. But

Let's widen the aperture a little bit. Tell us about the types of people who are making financial content on TikTok right now. Okay. In my many hours scrolling TikTok, frying my brain, I think I've come up with like five characters of sorts. The five people you meet on FinTalk? Yeah. Please tell us who are the five people you meet on TikTok right now.

I think we have to start with the day trader, bro. You are an idiot if you're not watching these three stocks for Wednesday's trading day. Last night, as always, I gave you the top stock in the market on S-B-E-T. What could be more trustworthy? He reminds me of Jim Cramer. Okay, so you're going to see a lot of creators like this. They will recommend a stock of the day, stock of the week. They also have very daunting music and you feel like, oh, shit.

If I don't buy this stock right now, it's the end of it for me.

And, you know, as we know, it's actually really hard to correctly pick stocks that are going to be winners. Something like 95% of pro stock pickers fail to beat the S&P over time. What's in it for these guys who are like, yeah, follow these stock tips? You can sell courses on day trading and people will pay a lot of money for your spreadsheets, for your trackers. Right. I mean, it's a very common thing.

impulse I have all the time, which is, I don't know what the hell I'm doing. I see all these people making tons of money. Can you just do it for me? You know, I have a confession during the pandemic. I thought I should be a day trader. And my family started calling me the Oracle of Okotoks, which is a small town in southern Alberta. Are you going to have like a Woodstock for Capitalist Canadian version? I should. I should. Yeah. Who's your Charlie Munger? If you're Warren, who's your Charlie?

Oh, man. Probably my dog from Kosovo. She's always by my side. Wow. Calculating those trades, waiting up, checking the Asian markets. Who's the second person that you meet on TikTok? And do I like him? Okay. I don't know if you like them, but you've probably seen a lot about the, I'm going to call them the disclosures hawk.

All right, you guys, Jeff Bezos has invested $70 million into a $30 stock. So time for me to show you which one it is. The stock is called Navius Group. And as you can see, it is still... So there are a lot of people who are watching to see what people like Jeff Bezos, Warren Buffett, Nancy Pelosi are trading. They're people who are seen as powerful and influential. And they're people who have to disclose their trades.

You know, Warren Buffett's pretty obvious, but Nancy Pelosi, most well known as the former Speaker of the House in the United States, she has a wildly and surprisingly successful track record, too, with her trading. And I think a lot of people look at that and, you know, there's this feeling that the system is rigged and that seems to be evidence of it.

And the implication is she's got insider intel on these trades and people want to copy that. So it's equal parts conspiracy and how can I get in on it? Yeah, exactly. But, you know, the thing is, like...

When disclosures are made, that's from trades months ago. So whatever sort of intel or whatever sort of movement that stock was doing, it's long gone. All right. Number three, Claire. I'm waiting for some good advice here, but I have a feeling I could be waiting for a while. Yeah, I'm sorry, Devin. My algorithm is rigged towards the bad.

But I think we can talk about something a little different. It's the realtor on TikTok, whether it's simple, like a creator telling you, you should invest in REITs as they're a great way to diversify your portfolio, which is true.

or telling you that REITs are guaranteed to make you big bucks, which is not so true. Or these really bullish creators telling you, you got to buy property now, no matter what it takes, no matter what financial risk it puts you in. I'm learning about using 0% credit cards to get the money to buy an investment property. And my friend Rodrigo over here is showing me how to pull money out of the card at 0% interest. I'm sensing a theme throughout all of these, which is like,

There are all these people out there who are getting rich, who are taking advantage of things I can't take advantage of. And I feel desperately out of it.

And you're going to prey on that and try to offer me a shortcut. Yeah, exactly. All right, let's keep going. Okay, we meet the debt vlogger. I have $40,000 in credit card debt for zero. So let's talk about it. So this woman then goes into detail about how she found herself in such a huge amount of credit card debt.

how she got out. A lot of people will actually show you their credit card statements. They'll show you what their interest rates are. It's a bit like watching a car crash in a way, but watching someone pull themselves out of it. Is the appeal like, thank God that's not me, or is there something else going on here? I think on a more basic level, a lot of people have been in credit card debt.

It's also a super stigmatized topic. Like, I just had a friend the other day, a very good friend, come over for wine, and she wound up telling me that she had just paid off $25,000 in credit card debt. And this is someone that I talk to weekly, sometimes daily, and I had no idea that she was in so much credit card debt. So to see these people come out and get to, like, follow along on their repayment journey...

Yeah, it's voyeurism, but it's also satisfying. Yeah, for sure. And are there actually good tips about getting out of debt? Yeah, a lot of these creators talk about the time-proven strategy, pay off the highest interest card. And they also talk about certain budget and repayment plans. I have personally found it very educational. Okay, we have one more, right? Yep.

unveil we are on my favorite one which is the budget freak how bad could the budget freak be that sounds great yeah the frugal freak the budget freak whatever you want to call it i don't do this often but every now and then i'll bring stuff to charge if there's an outlet i'm gonna use it anytime i use paper towels i'll rarely throw it out like at work or at my parents house i'll usually take it home with me unless they're really messy because i feel like they're good to reuse for

Wait, he takes home a used paper towel? Yeah. I understand like stealing unused paper towels. Yeah, he takes paper towels, paper napkins as his toilet paper at home, but he does buy toilet paper for guests. That's Bradley on a budget. I love his content.

I would say there's a psychic toll to living your life like that. You're taking up a lot of space in your brain. I live in that psychic space, by the way. Are you extreme cheapskate? It's sort of the product of my marriage in the sense that my wife doesn't worry about money, really. She's blessedly just like, everything's going to work out. So then I feel like I have to double down and be more worried about everything. So I'm like...

How long is that shower, kids? I don't feel that the dishwasher's full. We're running it and it's not full. I think Bradley on a budget would respect that. Bradley, I see you. There's also Caleb Hammer, who a lot of people love. Very popular podcast. He just basically screams at people who make poor financial decisions. You can't afford to go out. Yes, I can. No, you can't. Income that came in was $1,600. Rent is $1,200.

It's strangely addictive and strangely motivating. Some tips are obviously very extreme. My favorite one I saw was you should start fights with your friends and family.

I have so many weddings this summer that I have to pay for gifts for. Wait, why don't start? So you don't get invited anywhere. Okay. So it's the inverse me trying to get invited to Matt's wedding theorem. Yeah, exactly. Start a fight with Matt and then you don't have to buy stemless wine glasses from Crate and Barrel or whatever it is.

Let's just say that Matt would never have seamless wine glasses from Crate and Barrel at his house. Yes, thank you. You will get rich quick. We all will. Jared Sullivan, you are up. Who is making or losing money that is interesting to you? Devin, that's a great question.

Who is making money? The answer to that is remote IT workers in heavily sanctioned countries. Is this like one of the text messages you get that says, we've identified your resume and think you can make a lot of money by working at home? It's in that area. It is a wild story. So picture this.

It's 2020. There's this woman named Christina Chapman. She's living in a trailer in Minnesota. It doesn't have heat or running water or a working toilet. She's showering at the Planet Fitness gym. She took a coding boot camp, but it's clearly not helping her land a job. So in early 2020, she gets a LinkedIn message from a staffing company saying, hey, we need someone to be the US face of

for some overseas IT workers. These workers have managed to get hired at large US companies, and they need someone to basically accept the package from the company-issued laptop and

start the computer, download some remote access software. So her job is essentially like, okay, get all these laptops, plug them in, and then other people from outside of the country will be remotely using these laptops and therefore appearing to American companies that they're in America and so eligible to have these jobs that they are maybe not in fact eligible to have. Yeah. And eventually these workers get paid and

And she deposits the checks into U.S. bank accounts, and then she transfers the money overseas. And ready for the twist in the story? Yes. Okay. Turns out the staffing company was a front, and all these overseas IT workers worked for the North Korean regime and were...

funneling their money back to the state. And it's sort of unclear what the money was used for, but probably all like the normal North Korea stuff that they do, which experts speculate could involve helping fund their nuclear program. But North Korea is not opening their books to say how exactly they're allocating resources. Do we know, is it primarily like about money, like getting cash or was there any spying going on or anything? Okay, great question.

based on the indictments, it seems like a lot of it was just to generate revenue. They needed the cash. Probably obvious to most listeners, North Korea is heavily sanctioned. And

They cannot, they don't really participate in trade with most of the rest of the world. So they have to do all- Normally, if you're North Korean, you're not allowed to work for Salesforce. Your resume gets flagged. Let's just say that. Yeah, well, we don't actually know which companies were affected by this scheme. The indictments don't name names. So we don't know if Salesforce was in there. But these North Koreans, they managed to do it. 300 companies were affected by this one woman. At one point, Christina had 90 laptops.

She was signing documents for the North Koreans, like tax forms and stuff. And there's a text in one of the court volumes where she's like, I could go to federal prison for this. How much money did she make doing this? Okay, so she ended up making about $177,000 over three-ish years. That works out to about... That's not very much money for going to jail. Yeah, and she pleaded guilty.

But for her, she was able to get a better apartment and have groceries. She could shower at her house. She moved to a place in Arizona. So, you know, she was not making wild money. But the North Koreans, they made $17 million in revenue off of her alone. I feel like she could have maybe negotiated better. Yeah, she had a strong hand. Can I ask a question? How did law enforcement find out what she was doing? And was it because of her TikToks? That's a good question.

That I don't know the answer to. It's not evident in any of the stories I read about this case or in the court documents I reviewed. Some of these workers held onto the jobs for a long, long time and made a lot of money. Some of them got found out very, very quickly when say like their boss wanted to have a video call, right? And they tried to use in some cases deep fake filters and AI filters to try to resemble the Americans on their IDs they'd used. But AI deep fake filters are like pretty glitchy.

So a lot of them did get caught pretty quickly. So I suspect that probably corporations realized that,

oh, we've hired North Koreans. I didn't know there were deepfake filters that may help you. That's interesting. One thing I found in my research is there was a executive for Mandiant, which is part of Google's AI cloud network security thing. He says he's talked to many chief security officers at Fortune 500 companies and said most of them had realized that they had at some point hired a North Korean. So this problem seems like pretty wide scale.

So everyone at these big companies has realized at some point that some remote worker that they

were paying was probably in North Korea. North Korea wasn't just doing it through this one person. Yeah, there's only been a handful of these. They call them laptop farms busted in the United States. But it seems pretty clear that there are probably dozens of these that have not been discovered yet. So yes, it's a widespread problem. And the indictment against this woman, it says that the blue chip U.S. companies that were affected include a top five national television network,

and media company, a premier Silicon Valley technology company, an aerospace and defense manufacturer, an iconic American car manufacturer, and on and on and on. So these are big dogs. These North Koreans really got into some big computer systems, and it cost these companies, in many cases, hundreds of thousands of dollars in remediating their networks, right? Because this is a huge, huge, huge breach. Jared, is there any lesson to be learned here today?

About the nature of remote work. So this whole case, I think, is a wake-up call for companies. Remote work is great. It's flexible and has opened up new opportunities. But it also poses some very big risks. You've got to know who you're actually hiring. I also think it feeds, you know, employers have become very paranoid about

how much work the remote workers are really doing. A common refrain among the tech executives that I have spoken with is, I wonder how many of these people actually have other, entirely other jobs that they're also doing while I'm paying them for having a full-time job. Devin, I cross my heart that I have one job and it is here at Well Simple Business.

That is it for this week. Claire, do you want to tell people what they learned? Okay, so first we learned that the taco trade is tastier than the Trump strangle. We learned that you are an idiot if you're not trading this one crazy stock. And we learned that you can work for the North Korean government from your Minnesota trailer, but you might wind up going to jail.

Thank you for listening. This show is sponsored by Wealthsimple. It is made by me, Devin Friedman, Matt Keres, Sarah Rieger, with Matilde Erfolino, Leah Fetter, and Jared Sullivan. Help from Eva Cruz, Juanita Leon, and Allison Hopkins. Fact-checking and research by Brennan Doherty and Sarah Black McCulloch. Theme music by Andy Huckvale and engineering by Emma Munger. Special thanks this week to Claire Porter Robbins.

The TLDR podcast is offered by Wealthsimple Media Incorporated and is for informational purposes only. The content in the TLDR podcast is not investment advice, a recommendation to buy or sell assets or securities, and does not represent the views of Wealthsimple Financial Corporation or any of its other subsidiaries or affiliates. Wealthsimple Media Incorporated does not endorse any third-party views referencing this content. More information at wealthsimple.com slash TLDR.