Never Change Your Portfolio! Except When…
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Hello and welcome to the TLDR podcast, a show about the culture, gossip, and business of money. And this week, you're 35 years old. Do you know what your money's doing?

My name is Devin Friedman. I am here with my co-hosts. Matt Keres is the director of product for WellSimple. Our sponsor. Matt, are you ready to buy now, pay later for your Five Guys burger? I mean, the best meme I've seen on this is the guy from the Big Short with the quote, they're called synthetic collateralized burrito obligations and they're f***ing awesome. Ha ha ha.

Sarah Rieger is the business and markets correspondent for the Webby award-winning TLDR newsletter. Sarah, are you familiar with this turn of events? Do you know what we're talking about here? Yeah, the fact that you can now buy now, pay later for your DoorDash. Yeah. I'm honestly not surprised they've added it because I feel like it's so...

Like you add a burger and fries and drink and all of a sudden it's like $48. Can we just talk about the memes for one second? Oh, there's so well, China, the other one more great meme. While China is inventing super fast EV chargers and superior AI, America has securitized the cheeseburger. I honestly have seen like almost no memes. I've seen something way more annoying, which is like really earnest dialogue about it.

which I feel like is sometimes not what I need to see on the internet. Yeah, I think to survive in our current environment, our attitude should be, LOL, we're all going to die, LOL. Boy, do we have a show for you today. We're going to talk about the hard times for the largest electric vehicle maker in North America,

Maybe you've heard of them. We are going to talk about how you should build a portfolio over the course of your life. And we're going to have a special guest on to discuss the demise of a company older than Canada itself. And to get to those exciting topics, we are going to start with a question. Sarah, who is making or losing money that's interesting to you right now?

Tesla has lost a lot of money ever since its CEO became, let's say, a central figure in the U.S. government. Its business has hit a rough patch. Is that the best way to describe it? Rough patch sounds right. So its sales dropped 70 percent in Canada between December and January, and it's had really huge drops in China and Europe. Tesla's stock price is down by half since its peak in December. Matt, is that big number or small number?

It is a smaller number for Tesla than it is for other companies. Right. Like, we should qualify the fact that Tesla's share price behaves in a way different from, say, the General Motors' share price. A little more volatile. It's erratic. Yeah, if you're the CEO of General Motors, you're like, s*** your pants when this happens. Like, if you're Elon Musk,

It's pretty bad, but it's happened to you like twice or three times before over the last 10 years. Yeah, and that's kind of why I actually want to talk about is how Tesla's problems as a company might even run deeper than its CEO. Canada has seen the same boycott movements against Tesla that were seen globally. Like dealerships have been lit on fire. Someone smashed 80 Teslas last week in Hamilton, Ontario. And all of these dropping sales and movements have exposed something else weird going on with Tesla in Canada. Right.

What is weird? What's weird about Tesla in Canada? Okay, so Tesla sales, like I said, are down everywhere, right? And Canadians are pretty mad at the U.S. government right now, and we're seeing that change spending habits. But somehow, just as Canada's electric vehicle rebate was wrapping up in January, four Tesla showrooms claim they sold 8,600 vehicles in a single weekend. And now they're asking the government for $43 million in subsidies.

So what's the most likely story about what's happening there? Well, so if these dealerships are telling the truth, it means at this time that Tesla was losing so much popularity. The company was somehow selling two cars every minute for 72 straight hours without a break. So they're under investigation for this claim by Transport Canada. What else is going on with Tesla besides dip in sales? So Tesla...

One of the other, I guess, like, buds that's crawled out around this came out of Financial Times investigation. So they were poring over Tesla's books for the last six months, and they discovered that $1.4 billion U.S. dollars is unaccounted for. It's too early to say, like, how fishy that is, I think, until, you know, maybe more audits come out.

But like Tesla has had shifty accounting before. In its last earnings report, a lot of Tesla's profits came from unrealized Bitcoin gains. This is, I need to say, this is totally legal. So they basically counted their profits as a bunch of Bitcoin they hadn't sold, which will obviously count for a lot less next earnings now that the price of Bitcoin has dropped. Matt, is that a weird thing to put on your balance sheet?

It's, you know, it's not statistically normal for companies to hold Bitcoin. The question is, like, is this indicative of, like, a little bit of a carelessness within their approach? Well, this is why I think that I personally am just, like, suspending judgment for a couple of months, because in, I think, like, our modern social media environment...

Sentiment turns. You have like a whole apparatus of citizen journalists and professional journalists digging through every part of a company, everything anyone ever said. And that can lead to like a pile on of negativity or positivity. If, of course, if you go through a company's like financials with a fine tooth comb, you know, you're going to find some small things and you could turn them into big things.

I think the funny thing to me is, like, I just don't know if a bunch of the fundamentals justify Tesla's status as this, like, mega cap tech company. Our fact checker pointed this out. Tesla earned less last year than Canadian convenience store giant CouchTard, athleisure brand Lululemon, and Loblaws. You know, I think as we've talked about on the show before,

different companies' stock prices perform according to different rules. And Tesla has always been a vibes stock. You know, it behaves more like a meme stock than a lot of large companies do. So is this like live by the vibe, die by the vibe? My main reaction is that like,

If you're the CEO of any major public company and you become the face of the culture war to end all culture wars, that is probably not good business. And so like a big part of the stock move and, you know, potentially, you know, some of the sales numbers we've seen could be a reflection of that. With Tesla, everything has always gotten magnified, whether that's stock moves, sentiment shifts, news coverage. And so I think there's also a

something going on where you're seeing an outsized reaction to whatever change there's been? I guess the big question is like, let's say it's real that people hate Elon Musk. Is that going to

permanently or durably affect the sales price of the car if the reason people were buying the cars in the first place is that they're just good cars and they're good products? Well, the cars actually have been having a ton of problems. You know, almost every Cybertruck has been retrolled because the glue that holds the roof panels on has been flying off. Also, I think it's worth mentioning, like,

James Sarawaki put it really well in a recent piece for The Atlantic where he basically said Tesla was always this story company, right? Like its fortune as a company is tied to like its narrative. Yeah. And so I feel like the question is like, you're right. Like, what is the narrative around Tesla? Is this, you know, oh, the car company that made electric vehicles mainstream or is this...

this political brand that's really tied to this person. And I wonder how much people who maybe, I don't know, buy into a car for a little bit of a narrative, like, oh, I want an easier, you know, more exciting, futuristic future, want that to be their narrative, right? Want to be tied to Elon Musk's statements and actions. But, you know, like...

In California, a Tesla Model 3 is like basically a Prius now. It's like the default generic car if you don't want to pay a lot of money to fill up your car. It's like until recently, it was the anti-statement car. Devin, I don't, you don't have to talk about this if you don't want to, but.

Are you outing me right now? Listen, we can cut this from the podcast. If you're comfortable, is it weird owning a Tesla right now? How has that been for you? I just want to tell everyone that I own the cheapest Tesla that you can own. Where I live, there are so many Teslas that I do not feel conspicuous because everyone bought Teslas because it was much cheaper to own them. No one notices. No one cares or notices that I'm driving one. That's

That's really interesting because in my area, it's super different. Like Tesla's are a lot more rare to see. And I did see one that was graffiti not that long ago. What happens if Tesla's become like the new Ford F-150 or the new like Hummer Humvee? The dudes in camo are all like, yeah, my Tesla. I'm the dude. So that's what you call me.

All right, Matt, you're up. Who is making or losing money that's interesting to you right now? I've been saying this a lot recently, but individual investors have been losing money and it's been leading to a whole lot of anxiety. We've seen this in responses to our newsletter, outreach to Wealthsimple's team of financial advisors, you know, even in the broader media coverage. And so I wanted to talk about a slightly different angle on that anxiety, which is like, how should you respond?

So basically, people have been investing for a while. Their portfolios have been climbing. They've become accustomed to doing pretty well. Then a pretty unsettling period happens. So people are responding and saying, holy crap, what do I do now? Should I shift my whole outlook entirely?

Yeah. And we've given like a lot of the like classic advice here and elsewhere, which is like, tune out the noise, stick with your plan. Your investment strategy shouldn't depend on what's going on in markets. It should depend on, you know, what's going on in your life. But I realized that like we never really, you know, take it a step further and say, well, so like what exactly should you make your investment decisions based on? Yeah, I guess the question is like, well,

What are the things that are going on in your life that should make you change your portfolio and when you make those changes?

So the conventional wisdom sort of starts from this idea that most people don't have the, you know, ability to like consistently make money by like picking stocks or timing the market. And that the, you know, only real way that somebody can make money investing is to just keep your money invested for a while by holding a diversified portfolio. For most people, though, like

How much stocks versus, you know, safer instruments like bonds or cash you should hold over time is like not the same. You know, when you're young in your career, you're saving more than you're spending. You have a really long time before retirement. You could afford to take more risks. Is that because you have a longer time to make up for any bad things that happen? So it's something we covered over the last couple of weeks. There's this like, you know, great Peter Lynch line. What you learn from history is the market goes down. It goes down a lot.

The other main thing you learn from history is that, like, over time, they tend to recover. You know, for Canadian stocks, for example, over the past, you know, 50, 60 years, there were 22 times where they lost more than 10%. On average, it, you know, took less than two years to get back to a new peak. So really not that bad. A couple of those times, though, it took about five or six years to get back to peak, like after the 87 crash and the tech bubble.

And so, you know, if you were counting on that pile of money to help you get through retirement and you needed to like spend that down during that period, you could very well end up with much less than than you thought you would and much less than you need to to retire. You know, on the other hand, if you're young, you're not going to retire for like 20 years anyway.

you know, a five-year drawdown isn't great, but it's something that by the time you retire, you're like, we'll be distant memory. Right, right. The assumption that we're talking about here is that when you're young, you should have a risky portfolio. And when you're getting closer to retirement, you should take those risks

winnings off the table, put them in a conservative investment. Maybe you're not going to make as much money, but you don't have the risk of like losing 20% of your money and not having the time to make it up again, right? Exactly. So this like general theory of like how you should invest has been around for ages. This is the glide path, right? This is the glide path. The idea is you want to start investing

Pretty invested in stocks and over time gradually moved down towards bonds, not doing anything too sudden because you don't want to be too sensitive to the events of any one day. You don't want to be betting your retirement on whether you're selling before or after the tariffs hit or before or after, you know, deep sea comes out.

All right. So you're 25. What percentage of your money is in risky assets? And what percentage of your money is in stable assets? Everyone has very different circumstances. And like how you should invest your money depends not just on your age, like we'll talk about here, but like, you know, how much wealth you have, how much spending you have, what your risk tolerance is. And so there is no real one size fits all. You know, if you're like your average vanilla money manager.

Pretty much the conventional wisdom from basically any wealth manager at any of the major places is that, like, it's about 90% of your money would be a diversified portfolio of Canadian, U.S., and international stocks, and 10% would be in bonds. Okay. 35%. Does that shift? No. I mean, assuming that you're not going to retire until you're 65. 45%.

45, it would still probably be the same because you're still about 15, 20 years away from retirement. Well, and I guess part of that, too, is like your own personal life. Let's say you're one of those like trying to retire super early people like you might want to treat it as if you were older. Right. Yeah, exactly. The key metric here is like distance from retirement.

retirement or distance from needing to use your pile of savings as an income source versus as something that you're adding to. Right. So like, you know, if I'm 45, how much is it shifted by the time I'm 55? You're shifting about 20% of your equities into bonds by the time you're 55. Basically, you're cutting your equity risk in half by the time you're 65.

And then as you're using up more and more of your savings and you really need to count on the rest that's there, you're drawing down primarily your stock. So that by the time you're 85, you have, you know, only about 20% of your portfolio in stocks, 20% in cash, and then 40% in bonds. So something that's like pretty stable. It's going to move around a little bit, but like really not all that much. Sarah.

You invest your money, right? Yeah, it's not all in a, you know, pillowcase under my bed. Some of it is in other places. Do you manage your own money? Do you like make your own portfolio or are you just like someone needs to do this for me? I have a mix. Some of mine is in a managed and then some of it I do myself. I can't trust myself to do all of it. That would be a terrible idea. You're not the kind of investor who sees the markets tank right now and decides to move all their money, right?

No, and I'm not that kind of investor because I know people who have done that. Like I have family and friends who I've heard who have like in previous downturns, you know, they didn't have a ton of financial education. So when markets slumped, they got really scared and they were scared about losing all of their life savings. So they pulled out and were the worst for it. So I think that was like a really cautionary tale for me to kind of be like, hey, I need to set this up in a way that I'm going to feel secure about.

What would you say to the people who, you know, those folks who have like much more concrete concerns? I actually summarized it in a text message to someone. I'm not going to out them because they listen to this podcast. But basically, anytime like I know their portfolio might be looking spooky, I just touch them. Don't touch.

Because it's like you should be looking at this stuff not in response to the news, not in response to panic. Like if you've set this up in a way that fits your stage of your life and your goals, like we're not looking, we're not touching. If you touch that again, I shall kill you right now. Do not touch me. This is a no touching thing. Okay, so maybe you heard earlier this week that Canada's oldest company got approval to liquidate all but six of its stores. Right.

We are talking, of course, about Hudson's Bay. And if you've been following the story of Hudson's Bay, it's been sort of like a slow-motion car crash that has been going on for years.

For our final segment this week, we are talking to Vas Bednar about it. Vas is the co-author of the book The Big Fix, How Companies Capture Markets and Harm Canadians. And she writes The Great Substack Regs to Riches. Vas, welcome to the TLZR podcast. Thanks for having me. It's truly our pleasure. You know that you're like a staff favorite. People have been lobbying to have you on the show for like a really long time. Oh, wow. Yeah.

That's so sweet. I'm so honored to be here. I feel like you write so much about monopolies that literally every week I'm like, hey, Vass has an article about this. Check out the sub stack. Vass, let me ask you this. You know, if you were going to give a Cliff Notes version of

the history of this company, what would the plot points be? The Cliff Notes version of like the 366-year history. Exactly. That's like one bullet point per 75 years max. It's basically just the history of Canada, right? Yeah. Look, we would start in 1670. We have to just anchor in that historical moment, a royal charter creating HBC, exclusive trading rights, fur, river, etc., etc.,

But if we fast forward to maybe the times we are familiar with, right? In the 90s, they go through some fascinating acquisitions with other iconic Canadian brands. Zellers, right? Kmart Canada, right? They start to absorb discounters, which is also important in terms of setting it up as kind of a potential mega company. You're getting discount shoppers too, people who are still spending money, but maybe not as much. And that's how it kind of starts to grow its market share. Right.

Other discount segments that they had were like home outfitters. And then 2008 is such a historic year in terms of the recession in the U.S. and, you know, Facebook starting to explode, you know, Airbnb, Uber starting to be founded, like really kind of taking off as like a hinge year. That's when the company gets privatized.

under U.S. investors. And I bring that up only because we think of it as this capital C Canadian store, but it hasn't been capital C Canadian for a little while now. The last thing I would say in my version, in Vas's Cole's notes, is 2021, 2022, after the initiation of the pandemic, we see a major spin out. The bay broke itself up.

into two. They split out e-commerce into separate companies for each banner, right? Splitting out the Bay and Hudson's Bay. So it's almost like creating their own mini Amazon where they're

or showing their own brands, but also letting you access other brands. There's so much that I missed, right? But I would say those are a lot of the beats for me. 2008 was a really important year at the Bay because that was the year I worked at the Bay. That is huge. What department? I was in the women's clothing department. I mostly folded stuff.

It was not a happening place already. Were there any rules about how to fold? There probably should have been because I was bad at it. I did not make beautiful displays at that bay. So I perhaps contributed to its downfall. Okay. So that's the 90s you would say would be like the heyday of the bay as a commercial shopping enterprise. I mean, you call it a shopping enterprise. The bay calls itself a real estate company.

Okay. Right? So is it really shopping first or was the whole play here, you know, over time recently just the land play? Okay, so the company announces that it's going to have to restructure or go bankrupt. Should we care? Like, is this a story about an

an old company that couldn't reinvent itself, which is kind of the story of almost every old company. It's pretty unusual that it even exists at this point. Does it make a difference? Is there something to be concerned about here? What I feel concerned about is, given that the bulk of the Bay seemed to be fundamentally a real estate play,

Right. So when you think about how hard is it for other department stores to come here, to stay here, to compete here? Is it the foot traffic? Is it Canadians don't spend enough? Is it we're not urban enough? Whatever. Right.

is how are you unable to capitalize on the real estate that you do have and translate that real estate? You know, there's one of their buildings that I think got partially sold to a WeWork or sort of converted that way. But I do think there's ways to evolve that physical asset of real estate outside of

Right. Especially outside of static retail in this moment where we see a lot more pop up retailing. Right. We see more people pushing for more experiences, right.

Whatever it's called when you design things so you can like take photos. You know what I mean? When it's like you want to have that photo of you with something, et cetera, et cetera. How did you miss that? I do feel like underinvestment is probably the thing that hurt it the most, too. If you see yourself as a real estate company, maybe you don't focus on making your retail experience better. Yeah. Lazy innovation, right? You've got the size. You've got the heft.

You're in this moment where things are going really well and people come to you and you lose that incentive. You don't feel that you need to evolve or change or shift. And it is kind of jarring. It has been interesting to me to see the difference between the Bay and Simon's.

You know, like this one Canadian grocery store is really expanding right now and I think is pretty beloved. I'm a person who loves them all. Like I love a food court. I like to walk around with my little Orange Julius and like touching all the silky shirts. Simon's is so fun to do that. They have new products. They have a lot of Canadian products. It's well-lit. It's clean. It feels trendy. And their online shopping experience is good too. So it's interesting to see how like a department store can change.

do it right now. Well, and their floor is dense. Like it's a little bit of a squeeze at Simons, but it's always worth it. I feel like I actually know that I need time when I'm at Simons because I can't breeze through. I actually want to look at everything and sort of see everything. And I guess people no longer felt that way about the Bay. The Bay was much more liminal space, grossly. I'm like lost. I'm scared. Bad lighting. Yeah.

It does say a lot about, I feel like, Canadian identity that we hold way more nostalgia for Zellers, this, like, cheesy discount spinoff store than we do for, like, the Bay, which has this very, like, mixed history, especially from an Indigenous perspective, but is just such a core historical part of this country. Well, maybe it's a question of having forgotten where you came from. Mm-hmm. Yeah. Yeah.

In this moment of economic nationalism, you know, the Bay could have been a place, right? Or Hudson's Bay, right? Their online spin-off could have been the place, the destination to buy Canadian, right? If it really wanted to lean into that Canadian-ness, it could have done it, but it didn't. And that's the great irony of this moment. Right. As Canadians are Googling and downloading apps and maybe elevating the few, you know, brands and some of the largest firms that are at times the most frugal.

freaking annoying in our everyday lives. We're finding a newfound pride there. It doesn't seem that the Bay will be a part of that. And you don't see people coming to its defense. It does feel like it was something that would probably be around in some way, big or small, forever. But maybe it just missed where the puck was going.

Okay, Sarah, that's it for this week. Let's tell the people what they learned. We learned that Tesla is a narrative stock. And I think some people might say that narrative is a bit of a horror story right now. We learned that your investment decisions should be based on your needs, not the news. And we learned that the Bay, RIP, was more about real estate than retail.

Thank you very much. That is it for this week. Thank you, everyone, for listening to the show. It is sponsored by Wealthsimple. It is made by me, Devin Friedman, Matt Keres, Sarah Rieger, with Matild Erfolino, Leah Fetter, Sam Lee, and Jared Sullivan. Help from Eva Cruz, Juanita Leon, and Allison Hopkins. Fact-checking by Brennan Doherty. Theme music by Andy Huckville. And engineering by Emma Munger. Special thanks this week to Vas Bednar.

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.