A Blackberry office tower in Irvine, Calif., in October, 2020.MIKE BLAKE/Reuters
This is TFSA Trouncers, a series that profiles how Canadian investors have been investing their tax-free savings accounts. Whether you’ve been successful in growing your TFSA balance or not, we’d like to hear from you. Please fill out this form to contribute. You may choose to be anonymous, but we do require an e-mail address and may request a screengrab of your portfolio for fact-checking purposes.
A brave soul has volunteered to tell the story of how his tax-free savings account has gone off the rails. Meet Frank, a septuagenarian spending his retirement years just south of Ottawa when not travelling as a tourist.
This time of year, one of his favourite pastimes is playing hockey with a raucous bunch of fellow septuagenarians. Another is going cross-country skiing with his sexagenarian wife. Card games at the seniors’ centre are fun, too – and safer.
Annual contributions to his TFSA (initiated in 2014) were maxed out – a total of $83,500 – funneled early each year into the shares of one particular company. To date, he has a loss in the vicinity of $20,000. “I’m swinging for the fences but striking out,” says crusty old Frank, with a grin.
Frank has heard that investors should have a diversified portfolio and thinks it is a good idea for most people. But he was already well-diversified in his other accounts and they were more than enough to support him and his wife in their golden years, plus leave an estate to their kids.
“We have over a million dollars of equity in our principal residence, nearly the same amount in registered accounts that are invested fairly conservatively, and about $250,000 in non-registered accounts,” he explains. “I also have a pension and my wife will soon be on one, too.”
BlackBerry reports third-quarter profit of US$13.7-million, up from a loss a year ago
He could have just sat on his nest egg and enjoyed the mandated withdrawals. But what makes life more interesting for him is striving for a goal. While his human capital was not what it once was, he had some surplus financial capital that could be put to work.
Frank agrees that investors who win big in the stock market often get lucky. But it’s not the completely random kind of luck of rolling the dice or playing the lottery – it’s the kind that increases with due diligence. As French scientist Louis Pasteur said: “Chance favours the prepared mind.”
So what is in his TFSA? Just one stock, listed for trading on the Canadian and U.S. stock exchanges by the once-iconic Canadian company, Blackberry Ltd. BB-T.
Blackberry introduced a mobile phone in 2002 with a captivating e-mail feature. It became very popular, as did its stock. But in 2007, Apple Inc. launched its smartphone with more bells and whistles. By 2011, Blackberry was in a death spiral.
In the second half of 2013, a serious prospect for a turnaround emerged. John Chen, who had a proven track record for rescuing companies, was appointed CEO of Blackberry. The company also still had a lot of valuable assets, such as a portfolio of more than 30,000 patents.
In addition, Blackberry shareholder Fairfax Financial Holdings Ltd., guided by chairman and CEO Prem Watsa (the “Canadian Warren Buffett”), stepped up his support. He led the purchase of a billion dollars’ worth of Blackberry’s convertible bonds.
Frank liked what he saw and after a deep dive into the company, bought Blackberry’s stock in 2014. A big factor in his decision to keep adding to his investment over the next 13 years up to 2026, was the continuing sponsorship of Fairfax Financial.
Over the years, Mr. Watsa expressed faith in Blackberry’s status as an undervalued company headed toward recovery. His deeds backed up his words: Fairfax has maintained an equity stake greater than 10 per cent and rolled over its holdings of Blackberry’s debt as it matured.
Mr. Chen’s company posted a profit in the third quarter of 2014 after slashing costs and selling some assets. He then embarked on a growth strategy of shifting out of mobile handsets into software solutions for enterprises, vehicles, cybersecurity and the Internet of Things.
Several of the initiatives have made headway. Of note is its QNX software, a leader in operating systems for vehicles and the Internet of Things. Software for driverless vehicles has growth potential too, according to analysts.
Since 2014, quarterly earnings per share (on a diluted basis) have shown mostly losses, but they were shrinking in size and trending toward break-even. For the last four quarters of 2025, earnings have come in positive.
In January of 2021, Frank missed selling for a big gain when Blackberry’s shares briefly spiked as a meme stock but it was over “before I could blink.” Then the automotive supply-chain crisis during COVID-19 weighed on Blackberry’s QNX business for vehicles and its stock.
Further depressing the stock in 2022 was a ratcheting-up of interest rates to fight soaring inflation triggered by pandemic supply shortages. Another hit to the share price, near the end of 2023, was CEO John Chen’s retirement. John Giamatteo, formerly president of the cybersecurity division, is now CEO.
In January of 2024, Fairfax’s convertible debt was rolled over into a US$175-million convertible debenture at a 3-per-cent coupon and $3.88 conversion price, maturing in February, 2029. There is US$325-million cash on the balance sheet.
Although the loss on his stock has not been a serious blow, it still stings and Frank is thinking about halting additions to his position or even reducing exposure. Yet he feels that if he hangs in a while longer, his ship will come in. It’s a bit of a quandary trying to decide.
What an expert says
We asked Jennifer Tozser, a senior wealth adviser and portfolio manager with Tozser Wealth Management (at National Bank Financial) for her thoughts on Frank’s TFSA.
When I speak with investors about the stock market, I often describe the different stages of investing: you can be a hobbyist, a professional, an expert – or you might simply be gambling. When TFSAs first launched, the annual contribution limit was just $5,000. For a retiree with a solid net worth, that amount may have felt like “fun money,” something to experiment with and “give it a roll.”
Blackberry is an interesting example of how memory influences behaviour. In the 2000s, when it was still Research in Motion, it was at one point the No. 1 stock on the TSX. For an older investor who remembers that era, choosing the stock may have felt logical – even comforting. If something was once that good, surely it should be able to recover. But stocks don’t know where they “should” be, and our mental anchors don’t influence future returns.
There is also the very human appeal of taking a small risk after a lifetime of conservative decisions. That’s especially understandable given how TFSAs have evolved. For younger Canadians contributing from age 18, the TFSA is now a meaningful long‑term wealth vehicle – potentially even more significant than a traditional non‑registered account over a lifetime.
In this case, the investor is in his 70s, does not need the money, and the position is a very small weight in his portfolio. Behaviourally, he is anchored to a past high and hoping for a return. Whether Blackberry recovers or not, the real question is simpler: given his age and the limited financial impact, he should ultimately do what makes him happy.
Larry MacDonald is a regular contributor to the Globe & Mail and author of The Shopify Story