Diversification is not disloyalty. Same rule for a country, a marriage, and a portfolio. Part 3 of a four-part series.
Back to the couple from Part 1.
The best marriages I have been around have one thing in common that nobody puts on the wedding invitation.
Both people have their own friends.
Their own people. Their own Thursday night. A whole life that does not route through the other person, and that neither one feels threatened by.
The marriages that scare me are the other kind. Where one person has nobody else. No friends that are not shared friends. No income that is not shared income. No identity outside the room.
That is not devotion.
That is dependence. And dependence is not love, it just looks like it from the outside.
Because the person with no other friends cannot leave. Which means they cannot really choose to stay either. And the other person knows it.
Which is where Canada has been for about forty years.
The Number Behind The Number
About 70% of everything we sell abroad goes to one customer.
That share peaked above 90% in the early 2000s. It has taken more than twenty years to grind down to where it sits now. Twenty years for twenty points. Nobody redraws that map in a news cycle.
So when I wrote in Part 1 that maybe we do need other friends, I was not being cute. I was describing the only exit from the position we are in.
A country with one customer does not negotiate. It asks.
And it runs deeper than the export number. One of the country’s top trade lawyers pointed out something almost nobody knows. We cannot move enough potash out of Saskatchewan through our own rail and our own West Coast ports. So more and more of it ships through American rail. Including the potash we are selling to Asia.
Even the other friends run through their tracks.
Now here is the part that stopped me cold, and it is the reason this post exists.
Canada already has fifteen free trade agreements. Fifty-one countries. More than 60% of global GDP.
Nearly three in ten Canadian exporters who are eligible to use those agreements do not.
Read that again.
We have the friends. We have the signed paperwork. We have had it for years.
We do not have a friends problem. We have a phone-a-friend problem.
The Friends Are Real
I do not want this to read like a grievance, because the movement is real and it deserves saying out loud.
There is a national target now. Double non-US exports by 2035. Roughly $300 billion in new trade. A Canada-China agreement that pulled something I have not seen in a long time, the premiers of BC, Alberta and Saskatchewan agreeing on the same thing in public. A free trade agreement signed with Ecuador in July. A Strategic Exports Office stood up a week after that.
And the product is not the problem. It never was.
I wrote about the Five Fs back in April. Food. Fuel. Fertilizer. Forestry. Freshwater. Every one of those is something the entire planet needs, not wants, needs, and we sit on some of the largest reserves of all five.
We are not a niche vendor hoping somebody takes a meeting. We are the supplier every serious buyer on earth would love to have on speed dial.
So why has a trillion dollars in capital walked out the door since 2015?
Because having a phone number is not the same as making the call.
Same Rule. Smaller Board.
Now bring it home, because this is where you actually live.
Look at your own operation and count how many places you have exactly one of something.
… One lender.
… One capital partner.
… One market.
… One property manager.
… One realtor who brings you everything.
… One exit, one buyer type, one way out.
I have been doing this for 26 years and I can tell you the deals that ended careers were almost never bad deals. They were fine deals held by an operator with exactly one of something, on the day that one thing changed its mind.
The lender who pulled the line. The partner who needed out. The market that turned while the operator had no second market to lean on.
You are not diversified because you own six properties. You are diversified when no single phone call can end you.
That is the whole test. Six doors with one lender, one manager and one exit is one position wearing six addresses.
Why This Is Not Disloyalty
Here is the objection, and I have heard it from investors and I have heard it about the country.
“If I go get a second lender, my first lender will feel it.”
“If we go sell to Asia, Washington will take it as a slap.”
No.
Other friends do not weaken the marriage. Other friends are what make you worth staying married to. The partner with a full life is the partner who chose you this morning, not the one who had nowhere else to go.
A lender who is nervous that you have a second lender is telling you something about the relationship. Same for a customer.
The strongest position in any relationship is the one where you could leave and don’t.
That is not a threat. That is respect, in both directions.
And it is the only version of “better together” that is actually together, rather than one party holding the other in place.
One more thing, because I can feel some of you reading this as permission to walk out.
It is not.
Other friends is what you do WHILE you get back to the table. Not instead of it. The healthy couple with a full life still goes to counselling. They just show up to it as two whole people instead of one person and a dependent.
A former banker who now teaches business said the same thing this week, and he said it better than I did. We made a mistake for sixty years. We should have been diversifying to Asia and Europe for decades and we did not. We have to fix that. But right now, today, with two million jobs on the line, the first move is the table. That is not kowtowing. That is arithmetic.
I still want both sides in a room with the door closed. I want it more this week than last, because the longer this goes, the more real people get hurt, and the memes are not feeding anybody. The kids are still waiting on the two of them.
Go make your other friends. Then go back to the table stronger.
Both. Not either.
Do This This Week
Not tonight. This week. It takes a few calls.
1. Run The Count. Write down every single place in your business where you have exactly one. Be honest. Include the ones that feel fine right now, because fine is what they all feel like the day before.
2. Circle the one that would hurt most if it vanished on a Tuesday. Not the most likely to vanish. The one that would do the most damage. There is usually one obvious answer and you already know what it is.
3. Make one call to open a second option. Not to switch. To open. Coffee with a second lender. A conversation with a second manager. A drive through a second market. You are not leaving anybody. You are building the thing that makes staying a choice.
4. Do not use the agreement you already have as an excuse. If you have a relationship you have never actually activated, a lender you were approved with and never drew on, a partner who said “call me anytime” two years ago, you are the three in ten. Make the call.
The whole country is trying to learn this lesson in public, at enormous cost, with the world watching.
You get to learn it quietly, this week, for the price of a coffee.
Bad months end. Yours ends faster with a second phone number in it.
Next
Michael asked how tariffs would hit real estate. Back in Part 1 I gave him a coffee emoji.
In the final article I answer the question he actually asked. And the honest answer starts with three words nobody wants to lead with: I do not know. Then what 26 years of shocks taught me to do anyway.
Because being right about the fight was never the point.
I believe in you.
The Rough Patch: A Four-Part Series
Part 1: The Fight
Part 2: Four Questions
Part 3: Other Friends (you are here)
Part 4: Nobody Knows. Do The Work Anyway. (next)
In your corner,
Russell Westcott
#Inspire #Encourage #Love
