Warren Buffett Was Right About 2025
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Hello and welcome to the TLDR podcast. It's a show about the culture, gossip, and business of money. And this week, what's on a container ship anyway? My name is Devin Friedman. I am here with my co-host. Matt Karras is the director of product for Wealthsimple, our sponsor. Matt, what does today hold for you? My fiance booked the HVAC specialists. They're currently crawling in the ducts above me.

Sarah Rieger is the business and markets correspondent for, let's call it the most important newsletter in Canada.

Sarah, how are you? I'm really bad, Devin. What's wrong? So I did something really dumb yesterday, and my car is still at the top of a mountain. And I got back here by hiking for many hours with no cell service and encountered a bear on the way. Wait, so what happened? So after work yesterday, I go for a little drive up a mountain road being like, I'm just going to casually read my book by this mountain lake.

It turns out the snow on the road was covering an extremely large pothole that my car fell into. Uh.

You're like one of those people on the internet whose car went into a sinkhole. Truly, truly. What happens now? That's a great question. I don't know. I don't know what happens now. And how are your axles? They're probably hurt. Yeah. You don't know what an axle is. I have no idea. Stop with the bullshit. That was the only word that I thought would be relevant. We have a special guest this week.

Swap Parikh is the vice president of product for WellSimple, our sponsor, and also, I believe, Matt's boss. It's true. Swap, welcome. Hi, everyone. Is that just like a strictly nomenclature-y thing to be a boss of Matt? Because it doesn't feel totally possible. That's how I think of it. I work next to Matt. Yeah. But above him on the org chart. Okay, we have a spectacular show for you this week. We're going to talk about...

the events in Geneva this weekend, the trade deal that is apparently happening between the Americans and the Chinese and what it means for one particular ship

We are going to talk about the last three months, which, depending on if you were a retail stock trader, buying and selling the dip was a very exciting time. Or if you were a set-it-and-forget-it person, a basically non-event. And lastly, we're going to talk about the great Warren Buffett, and we're going to see the stars and hearts in Matthew's eyes. We're going to get there with a question from...

Sarah Rieger, who is making or losing money that's interesting to you right now? Well, some people are going to be losing a little bit less money if they're shipping goods between China and the U.S. because the U.S. and China have reached a possibly temporary de-escalation in the trade war. This weekend was a weekend of fragile, temporary ceasefires.

Tell us what you're talking about. So the U.S. has now agreed to reduce its tariffs on Chinese dreds from 145% to 30% for the next 90 days. And China will also reduce its tariffs on U.S. dreds from 125% to 10%, which is obviously like a really huge reduction in the damage that these tariffs are going to cause. But it still leaves the U.S. with the highest tariffs it's had since the 1930s, and it

economists are still saying that this will cause America to significantly reduce its Chinese imports. Okay, yeah. So, you know, full transparency, we are re-recording this segment after the events over the weekend in Geneva, where the U.S. and Chinese trade delegations met and apparently found common purpose. But Sarah, can you tell us a little bit about the original thing

you were going to talk about and why it's still relevant? Well, I'd read this really fantastic investigation from Bloomberg that dug into the exact contents of a ship that had left China for the U.S., just kind of with the unfortunate timing, where a lot of the goods on the ship were some of the first to be slapped with that 145% tariff rate. And I think it's still a really interesting case study for what's going on because we

If you're shipping something, the timing of when you send it really is going to affect how much you pay when these tariff rates are kind of like jumping all over the place. Yeah, I mean, it's interesting because on one hand, you have the speed of the news cycle, right?

But the reality of planning your business and literally getting a toaster from China to North America is a totally different timetable. Totally. It takes like a month to get from China to the U.S. Okay, so tell us about this Bloomberg piece and why you found it so interesting. So Bloomberg totally did the manifest for just one ship, the OOCL Violet. When

When it left Dalian China on April 2nd, it was just facing the original 20% tariffs from the U.S. It was carrying goods worth about $564 million U.S.,

But when it landed at the port of Long Beach on April 24th, so just over three weeks later, the importers of those goods were facing more than $400 million in new charges on top of pre-existing import fees. So if you're this importer, this giant container ship shows up at Long Beach and you are on the hook for your part of this giant $400 million bill. So do we know how much less would it be now? No.

It is so complicated to discern because the rules differ so much and they've been changing so much. But if that boat had left China now that this new, I don't know, tariff ceasefire is in place, they would be paying $151 million in extra taxes, roughly. So not $417 million, $151 million.

You know, the appealing thing about this story to me, among many things, is that you're taking this really abstract idea, turning it into like actual practical, like they looked at a shipping manifest of stuff. Like what is on this boat that these enterprising reporters dug into?

So there were just so many products on this boat that, like, I can't even name all of them. But clothing, cars, laptops, medical equipment, tools, home decor, food. We can look at one company, Big Joe Forklift.

a forklift dealer in Nebraska that had ordered $95,000 of warehouse equipment. But because of the timing of when that equipment got loaded onto the ship, the company paid an extra $109,000 in taxes, which again, like just a huge surprise cost for just one dealership. Right. So if you are trying to understand how tariffs work,

This is a great case study. Yeah, exactly. And I think the thing that really jumped out for me is how this is changing companies' behaviors because if you're Big Joe or another similar company,

you may not be able to pay that bill. Like maybe you can shoulder it for a month or two and kind of increase costs to the people that you're selling your goods to, but maybe you can't. We've seen in the last couple of months, some importers have canceled shipments last minute. Others have even canceled like mid-sailing to the point where like some goods have been abandoned to the shipping companies or even just left at the docks.

So if you're like order $100,000 of equipment and it shows up and you owe another $100,000 in tariffs plus,

You might just be like, you know what? I'd rather eat those costs of the money I paid than pay even more on top of it to get the equipment that I ordered. Well, it might not even be a choice, right? You think of how much credit does your business have access to? How much cash do they have on hand to pay for that? Like some companies work on such thin margins that they really can't swallow this. Okay, so my question, of course, is what does this have to do with me or listeners? Like why do we care more

what America is doing with its fluctuating meandering tariff demands.

I think there's a really like deeply human reason that it's such to see businesses closing. It's such to see them suffering and dealing with the possibility of like job losses. But on a bigger scale, too, half of all goods that Canada imports travel through the U.S. And this is a huge tariff escalation still, even if it's lower than it was a few days ago.

Are we saying practically that if you buy Chinese-made goods, for instance, there's a good chance that they entered North America through the United States, so those cost increases will be passed on to you? Yeah. If you're a company that's importing a lot of stuff from China or other tariffed places, how are you negotiating things? Are you canceling your orders? Are you finding workarounds? Are you shipping to Canada?

A lot are canceling orders. A lot kind of ordered a lot of stuff in advance to kind of get out ahead of tariffs. But one of the most interesting workarounds that I've read about is how some U.S. retailers are now shipping goods straight from China to Canadian fulfillment centers. The Logic actually reported that some of these importers are hoping to store goods in Canada until tariffs are strapped and they can be sold in the U.S. again.

Some others are considering focusing on the Canadian market, but others are kind of using this as like a holding wait and see strategy. Like if these tariffs are changing day to day, maybe you ship them to Canada to be a little closer to the U.S. And then if rates drop, you know, you send a few truckloads down instead of gambling on those like month long waits to get stuff across the ocean. Sarah, have you thought about, you know,

Perhaps smuggling bananas over the border, maybe, you know, doing black market banana business. I think it's going to require you retrieving your car from the mountaintop, though. That's true. First step, get car batch. Second step, start banana spundling operation. All this money in the banana stand. Matt Keres, you are up. Who is making or losing money that's interesting to you right now?

Well, you know, I could go out there and say some line like Warren Buffett's making a lot of money as like the excuse to talk about it. But we all know that's actually just an excuse. You know, Warren Buffett last week announced his impending retirement. And it's hard, you know, to have a show about the culture gossip and business of money without hitting a big topic like that.

Yes, he is a giant of the business culture and gossip of money. I mean, he's probably done more for the culture of money, at least the modern culture of money, than basically anyone else. He's pioneered the identity of like lovable billionaire. Everyone loves him across the board. Yeah, I mean, it's actually, I mean, that's what I was thinking about. Like,

You know, look, there is one thing people are like often like, oh, you know, everyone just looks up to Warren Buffett because he made a lot of money. But like there are a lot of other really, I mean, four other people that are richer than him and nobody likes any of them. So why is it that he got spared? Is it that he got spared or is it that he was got out in front and created an identity and a set of.

ideas that he aligned himself with that people actually just really like. Yeah, I mean, that actually is my contrarian take. My contrarian take is that the story for Warren Buffett is that it's really not about the money. People love him for the culture that he created, and that actually helped him make even more money than he already was making. So I think this is as good a time as any to ask a really basic question, which is like,

Why is his retirement such a major news event? Why is it getting the same treatment as the selection of the Chicago Pope? Yeah, so it's kind of the comparison is not really as far off as you might think. Like capitalism is now the norm across around 75 percent of the world's population. So if you think of Warren Buffett as the spiritual leader of capitalism, as many people, myself included, do, you know, his retirement is sort of comparable to the choosing of a new pope.

I think most people, when they hear about Warren Buffett, they're like, what were his essential insights that led him to be able to make so much money? And how do I do them myself? And then the question I have is like, are his insights now so universally adopted that they're not going to make you that much money anymore? And there's going to have to be a new, different kind of Warren Buffett that comes next.

So Warren Buffett started out as what people used to call like a cigar butt investor, like coming out of World War II, purchasing companies was out of fad. And there were companies that if you dug through their financials, you could buy for the amount of cash or cash-like stuff on their balance sheet and then sell the company and you'd make a guaranteed profit. And

That made Buffett a good return for a couple of years. But, you know, the big insight happened when his partner, Charlie Munger, apparently told him, hey, you know, cigar butt investing will only get you so far. The real value comes from finding high value companies like great companies that can create lots of cash flow for years at a good price. And he went on to buy a whole bunch of those from See's Candies to Coca-Cola to, you know, eventually Apple.

that he then rode for years. You know, the two things that you can learn from are one, you know, just sticking with it. And then the second is you can get the best deals when other people are desperate. His line is like, we don't try to predict when markets are going to become fearful or panic. You know, we wait for those things to happen and make sure that we're ready to be greedy when other people are fearful and fearful when other people are greedy. One of the insights is like, have a bunch of money

and wait until things crash, and then buy the things that you think are undervalued in a crash. So that's, yeah, that's one of his things. His second is like, find companies that you think can compound for years.

Right. Actually valuable companies rather than like, what's the play I can make for the next two days to make a little cat? It's like, you know, places you believe in. Yeah. And then third is like, once you find those, stick with them. But I think that the trick, though, with Buffett is like all of these things sound simple, but you wouldn't be able to make money off of them if they were actually simple. There are structural reasons why most people can't do those things. And I actually think that with Buffett, the reason he could is

didn't have as much to do with the money, but really how he set the company up and like how he invested in his own persona. Because the main thing that he did, at least from what I can tell as an outsider, is he

create an ethos around the company that inspired and attracted the most loyal flock of shareholders in recorded history. And that is what allows you as the person in charge to have billions of dollars sitting around during the boom times so that you can invest in the bad times. It sounds like kind of what you're saying that Warren Buffett at the end of his career, in fact, was mostly a brand.

someone that you trust, whose persona that you like and identify with, and someone that you're going to have some patience with and have some faith that their investments are going to pay off in the long term. You know, when I tell myself the story of Warren Buffett and Berkshire, initially, you know, when I started learning about him, I thought that he, you know, had some secret magic sauce as an investor. And

The magic more seems to be how he's like curated his reputation. He was the first person to take these dry SEC required things and turn them into like

culty rituals. Nobody else turned an annual meeting into a festival where all of your shareholders and fans would come and watch you do hours and hours of unscripted Q&A. Nobody else wrote lengthy shareholder letters that were aimed at the common reader. A lot of people copied it subsequently, including Bezos and Larry Page, but he really started it and at the same time also adopted and

really reinforce this persona of like the every built man's billionaire. One thing I love about Warren Buffett is his diet was so awful. He pounded like six cokes a day and ate like fast food constantly on the job. And he was like, this is what fuels me through. I don't know. It has such like basement trader energy. I think that's part of the narrative though, right? Like that's like the house picture that keeps coming up. I'm sure he has a bigger house. Oh, for sure, right? Somewhere.

I don't care if you're Warren Buffett or if you're Jimmy Buffett, nobody knows if the stock is going to go up, down, sideways, or in circles. All right, Swap, who is making or losing money now or in the past few months that's interesting to you? So even though stocks are back where they were before Donald Trump announced that poster board of tariffs, a lot of people made money and a lot of people lost money. But particularly some retail traders made a lot of money. Yeah.

Tell me more about what's happened with retail traders the last few months. What's a retail trader and what do they do? So a retail trader is a person that invests their own money through something like Wealthsimple. So let's go back to like where all of this started over the course of the last three months.

We came into January. The Trump administration was about to take over the U.S. government, and everyone thought it was going to be very pro-business. We're going to deregulate everything. We're going to cut taxes. Stocks were rising. Big boom in November when he won the election. And that kind of

started to change a bit in January with Canada and Mexico putting out tariffs, starting to negotiate the tariff deals, and the market started to stop rising. And you started to see that there was some increase in fear in February going into March, and then they had announced Liberation Day. And that's when it started. Trump got on stage behind the White House. His Commerce Secretary handed him this poster board. And on the poster board had

had all of these tariff rates for every country in the world. The market started to drop. I think we dropped 4% then. And over the course of three days, the market dropped 15%. We've seen drops like this in the past. COVID was a good example, but it was markedly different this time. In COVID, when the market dropped, you saw retail investors actually selling a lot of their stock. In this drop, you actually saw something very different. You saw retail investors buying at a rate that we've never seen before. And

The institutions were actually selling. The hedge funds were selling. The institutional investors were selling. And they were selling to retail investors. Okay, yeah. You have a really interesting point of view, Swap, because you basically sit at the dashboard of one of Canada's largest and busiest trading desks for retail investors. And you see what they're doing. So the funny thing about the last three months is that if you followed...

the headlines, there was an incredible amount of anxiety, dread, fear. But then it's like if you had not looked at the markets or the front page of the newspaper, you know, since the beginning of the year, it's almost as if nothing happened. So the question I have is like, who fared better, the people who acted like nothing happened or the people who were responding to markets?

So I think that's a good question. I think if you, if you did nothing, you, you earn nothing. Everything's kind of where it was. Uh, but you have a lot more information. That's the trade of like the buy and hold investor, the Warren Buffett. He actually said it in his, um, in a shareholder meeting, the volatility of the last 45 days doesn't concern him. It's a blip. It like basically didn't happen. It didn't happen. Yeah, exactly. And like who fared well, uh, well, I, I,

I think there was a lot of people on X or Twitter, as we used to call it, talking about buying the dip, talking about using technical analysis to show where the market would bottom. I called the bottom like four times. I was right once. I was wrong three times. I just want to know, like, the people who think that they can outsmart the markets.

What were they doing? Give us like a little bit of just like an over-the-shoulder view of how people like that operated during all this volatility. So I think that there's like probably three types of traders here. There's the, I'm going to keep buying the dip. Every time the market goes down, I'm just going to buy options.

I'm going to buy my favorite companies, Tesla, Amazon, et cetera. And I don't think those traders actually fared super well. We like to say like the market kept dipping and you bought the dip and it was dipping more. Yeah. The market can stay irrational longer than you can stay solvent. Exactly. And so there's a second group of traders that

basically had targets in mind. There was this really big target of the S&P 500 going down to around 4,800. A technical trader would tell you that the reason behind that number is it was the high in 2022 before the market dropped. So there's this view in technical trading that any major tops usually get retested. So it becomes a level that's like, basically like, it's like you tell someone about it, they tell someone else about it, and it becomes a thing.

And that level was 4,800 and actually marked the bottom of this volatility that we saw in April. And there was a lot of volume done there. And so those users did really well. And I would think that they are the Warren Buffett of day trading. They had patience. They had discipline. They knew what they were looking for. Matt has a smile. No, I just I mean, I think it's the difference in time frames is just is just wild to me.

you know, the people that thought that they were patient were patient for like five trading sessions. Whereas like, you know, what investors like Buffett call patience are like, you know,

waiting 10 years or something like that. They have to be right a lot more because they're making a lot of trades and a lot of decisions in the thing. Maybe going to the last one, the last type of trader is the momentum trader. And this is the most interesting type of trader. It's like the market's down. So I'm going to buy puts, assuming that the market's going to go down. Suddenly the market's up. I'm going to buy calls, an option strategy, because you believe the market's going to go up.

And this is the trader that flip-flops on a daily basis, sort of sees momentum in the market and then kind of chases momentum. This is what you really find on social media platforms. That the same person with 200,000 followers would be telling you to short on Tuesday and then telling you mortgage your home, buy everything on Wednesday. I think it's worth mentioning just how much of gambling this type of trading is in that the house does usually win. There was this famous study from, I think, Brazil's

SEC that 97% of day traders who traded for about a year lost money. Like the odds overall are not good.

to try to do this type of trading. Are retail traders way more active in moments of great volatility like the last three months? Like, is there just like way more trades happening? Yeah, so I think you, we saw this in November when Trump won the election. There was a lot more trades happening. We see volume go up with volatility. Not only buying, volatility swings both ways. There are customers that are selling. A lot of the volatility is headline driven. Can you take us through the eyes of the very online, what the sort of

the most interesting incidents and motivators were in the last couple months. So one thing that was all over social media was this indicator that is called the Zweig Thrust. And retail traders absolutely love this. There's these charts and these tables where they show the six-month, one-year, five-year, 10-year return, and it's all green. And what it really means is when stocks go down a lot,

They look at the number of advancing stocks versus declining stocks reaching a certain percentage. And if that happens within a 10 day period, this thrust is turned on. And when it happens, the market goes up 20%, at least 20% over the course of a year. And

It's happened nine times. Well, every post on Twitter that was like, the market's actually going to go down. We don't actually have certainty around tariffs was followed up with, but the Zweigvig breath stress has triggered. Don't worry about it. Everything's going to be fine. And it's interesting.

A lot of retail trading mentality is movement around like a single thing that everyone starts to believe and then they start acting on it. It just snowballs. The educated people do it too. Like the big chart that the bears had, you know, saying that like stocks are going down is this like made up policy uncertainty index with no Y axis that, you know, looks really scary, but like nobody had any idea what it meant. But it's, but it's an all time highs. It's

It's at all-time highs, and stocks are back up, even with it.

Okay, that is it for this week. But before we get to what we learned, we have a question for you. Or actually, we want to know if you have questions for us. One thing we know for certain is that there is enormous uncertainty right now, economically specifically. We feel it. You feel it. And we want to be here to help address that uncertainty, see if we can answer some questions. So what we are asking you to do is send us a voice memo.

Tell us what your most pressing economic concern is. What are the things we can reassure you about? What are the questions we can answer? So how do you do it? You can leave us an actual voicemail at 226-444-2833. Or you can send your voice memo to tldrpodcasts at wealthsimple.com. Again, tldrpodcasts at wealthsimple.com. Sarah, can you tell us what we learned today?

We learned that all of the uncertainty and flip-flopping over tariffs is really starting to cost some businesses. We learned that Warren Buffett had the right mix of investing luck and skill that we might not see again. And we learned that the messier the markets, the more people are trading, but they might want to do that with some caution.

Thank you for listening. This show is sponsored by Wealthsimple. It is made by me, Devin Friedman, Matt Karras, and Sarah Rieger. With Matilde Erfolino, Leah Fetter, Jared Sullivan. Help from Eva Cruz and Tom Johnson. Fact-checking and research by Brennan Doherty. Theme music by Andy Huckbill. And engineering by Emma Munger. Special thanks this week to Swat Parikh.

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.