We hope you are enjoying Canada’s 150th birthday. In the midst of the celebrations and fireworks, take a few minutes to try our Investment Quiz with our best wishes for a happy summer.
- What is the oldest continuous dividend paying company in Canada?
- The Toronto Stock Exchange opened for business in 1871 with 14 brokerage members. When did its first competitor appear?
- The Toronto Stock Exchange once closed down for three months. When and why?
- Who is credited with developing the concept of value investing?
- Where and when did the first successful exchange-traded fund (ETF) begin trading?
- How is a trading symbol assigned on the S&P/TSX?
- What happens to bonds when interest rates go up?
- Which Canadian company’s Southeast Asian gold deposit created an investment frenzy involving a mysterious corpse in the jungle, a wave of lawsuits from investors and a shake-up of Canada’s stock exchanges?
- Royal Bank of Canada is now the largest stock on the TSX by market capitalization at $139.2 billion. Which two tech stocks once held that distinction?
- What is the largest takeover of a foreign corporation by a Canadian company?
+ A bonus question on the U.S. Stock Market:
- Of the 12 original stocks on the original Dow Jones Industrial Average of 1896, which is the only one still trading under the same name?
- Bank of Montreal since 1829 (followed closely by the Bank of Nova Scotia, since 1832). (We cover the Bank of Montreal in The Successful Investor and Bank of Nova Scotia in both The Successful Investor and Canadian Wealth Advisor.)
- 1896. The Toronto Mining Exchange was formed in response to a mining boom in British Columbia. In 1899, the Standard Mining Exchange was opened. The two mining exchanges merged with each other in 1902 and became part of the TSE in the 1930s.
- In 1914 at the outbreak of World War 1 fears of a worldwide financial panic caused the exchange to be closed. Nonetheless, corporate profits and share prices rose dramatically during the war.
- Benjamin Graham. In 1934, he and David Dodd co-authored Security Analysis, which explained how the true value of a stock could be established through research. Rather than relying on speculation and insider “tips”, investors who followed their approach could identify and buy stocks priced below their real value. Generally accepted as the first rational investing system, it is the foundation of our approach at TSI Network.
- On the Toronto Stock Exchange (then called the TSE) in 1990. Toronto Index Participation Shares (TIPS) tracked the TSE 35 blue chip index. It evolved into today’s iShares S&P/TSX 60 Index ETF, which we follow in Canadian Wealth Advisor.
(A 1989 index participation shares experiment in Philadelphia was ended by a lawsuit.)
- Companies can request a symbol. If that symbol is not available, the TSX assigns one. If the requested symbol was used by a previous issuer, the company may have to wait a while. The symbol cannot be re-assigned for 53 weeks after it was last in use.
- When interest rates go up, bond prices go down and vice versa. For instance, if you hold a 10-year bond paying 2% interest and rates rise to 3%, the market value of your bond is sure to fall, since investors can buy new bonds paying 3% interest.
- Bre-X, which in 1993 announced an enormous gold deposit in Borneo. The stock soared from penny stock status to a split-adjusted high of $286.50 in 1996. In 1997, after the reported suicide of a Bre-X geologist in the jungle, the deposit was revealed to be a fraud. Bre-X filed for bankruptcy and investors lost billions.
- Research in Motion and Nortel Networks. In October 2007 Research in Motion (now BlackBerry) reached $67.35 billion in market cap to pull ahead of Royal Bank at $67.34 billion. At the height of the late 1990s tech boom, Nortel accounted for more than a third of the value of all companies on the TSX reaching a market cap peak of $283 billion in July 2000 with a share price of $124.50. It declared bankruptcy in 2009. (We currently have BlackBerry as a hold in The Successful Investor.)
- In 2016, Enbridge bought Houston-based Spectra Energy for $37 billion in stock. Completed in early 2017, the deal formed the largest energy infrastructure company in North America. By contrast, when Thomson Corporation acquired British-based Reuters Group in 2008, it paid $17.2 billion. And Nova Scotia’s Emera Inc. paid $13.9 billion in 2016 for Tampa-based TECO Energy. (We currently have Thomson Reuters and Emera as buys and Enbridge as a hold in The Successful Investor.)
- General Electric (the other original stocks: American Cotton Oil, American Sugar, American Tobacco, Chicago Gas, Distilling & Cattle Feeding, Laclede Gas, National Lead, North American, Tennessee Coal Iron and RR, U.S. Leather, United States Rubber.)