We in the Great White North have a lot to offer the world. And yet we usually take a back seat to our American brethren, whether in movies or politics or music. The same is true of the investment industry. While Canada is flush with experts on the markets, not much is written or said or thought about them. Why is that? Do we lack able investors? Are they
all too timid? Have the best of them moved to the U.S.? In my opinion. . . none of the above. Rather, there’s a lack of strong platforms to showcase the investment talent that exists in Canada. “Out of sight, out of mind,” as the popular saying goes. I can’t remember ever seeing a worthy made-in-Canada investment compilation on any bookshelf, whether that be in a store, house, or school. My mission in writing Market Masters: Interviews with Canada’s Top Investors is to create a strong platform (but not the platform, as that would be much too grandiose), to grow awareness of Canada’s Market Masters, and to share their timeless market wisdom with you, the reader. Some are well known; others not so much. Some are top-down, others bottom-up. Some are growth-oriented, others value focused.
Some are active, others passive. You get the point — these Market Masters differ in their approach. Although the 28 Market Masters featured in this book span different areas on the market paradigm, their objective (with exception of the passive investors) is all the same: to beat the market. All of the Market Masters seek to compound wealth over time,
which, collectively, amounts to tens of billions of dollars.
But then the question becomes, so what; why should I care? I am aware of the common perception of the Canadian stock market, specifically the Toronto Stock Exchange (TSX), as a “primitive resource-based market.” Through this book, I hope to not only debunk that misconception but also to establish why the Canadian market is essential not only to Canadian investors but to international investors, too. While some may discount the Canadian market, others capitalize on its breadth, depth, and activity to further their investment winnings. A striking example came up in my conversation with American-born Bill Ackman. “We’ve had a very favourable experience in Canada in pretty much everything we’ve done,”said Bill. In another conversation, Kiki Delaney explained, “[On the TSX], there’s a lot of world-class international companies.”
In most people’s eyes, though, the Canadian market remains “chockfull of resource stocks.” As you will learn throughout this book, and as echoed by many of the Market Masters, there are many strong multinational Canadian companies on the Toronto Stock Exchange. And the exchange, in and of itself, has a storied history, and during my research I discovered facts that surprised even me.
The Canadian market is strong, resilient, and progressive.
Strong: The TSX, which is more than 150 years old, contains roughly 1,500 listings that together make up $2.575 trillion in market capitalization, with 39.7 billion shares trading hands on an annual basis. That makes the TSX the ninth-largest exchange in the world, just behind China’s Shenzhen Exchange, but ahead of the German, Indian, Swiss, Australian, South Korean, Spanish, Taiwanese, and Brazilian stock exchanges. The TSX boasts the greatest number of listings of any exchange in North America and has the second-most listings worldwide.
Resilient: The Great Depression of 1929 did not have as significant an effect on Canadian trading activity, or on the brokerage business, as it did on the U.S. and its stock exchanges. Also, the TSX was not as hard hit after Bloody Monday (1987), posting a one-day loss that was half that of the U.S.’s New York Stock Exchange.
Progressive: In the late nineties, the TSX was the world’s first exchange to introduce decimal trading and to install a female president, Barbara G. Stymiest, and was North America’s first large exchange to move to a completely electronic trading environment. Recently, there’s been a push, most likely perpetuated by investment bankers in light of a commodities bear market, to further diversify the TSX, which may be deemed a renaissance of sorts if the trend continues. For example, many significant non-resource IPOs have sprouted on the TSX: Cara Operations, Spin Master Toys, Hydro One, Sleep Country Canada, and Shopify, to name but a few.
The Canadian stock market is essential. And there’s no better authorities to teach you how to capitalize on its treasures than the Market Masters I have interviewed for this book. Ignore this “dark horse,” the Canadian market, at your own peril. Little may still be known about the Canadian market by the world’s investors, but it will continue to succeed, whether expectedly or unexpectedly, recognized or unrecognized. Canadian stocks have exceeded the returns of international stocks (8.3%), bonds (6.2%), and T-Bills (4.6%),
from 1934 to 2014. And we’re not very far behind the U.S. market’s compound annual return of 11.1% versus Canada’s 9.8% over that same 80-year period.
The market is like a cherished childhood videogame of mine, Pokémon. At the start of Pokémon, Ash, the protagonist, is tasked by Professor Oak with choosing one of three Pokémon before starting on his epic journey: Bulbasaur or Squirtle or Charmander. For a naïve young gamer, picking just one Pokémon was quite the dilemma: which Pokémon was strong enough to actually beat the game? What I found upon playing Pokémon three separate times, once with each of the three characters, is that I could beat the game with any Pokémon. Any of the three cute characters a player chooses will achieve his or her objective, just as one can beat the market by employing any set of strategies on any part of the market paradigm. With this book at your fingertips, you can pick your favourite Market Master, or even a couple of them, to invest alongside with and beat the market. It comes down to identifying which Market Masters’ strategies appeal the most to you and which of those strategies you are most comfortable using in the market. For instance, if you’re a conservative person, the risks involved in growth investing most likely aren’t for you. Conversely, if you thrive on risk, you may very well find value investing boring. You can be certain that at least one of the Canadian Markets Masters featured in this book will be suitable for you. The only question is which one.
I finally started writing Market Masters: Interviews with Canada’s Top Investors in January of 2015. The motivation was ever present as the oil crash of 2014 continued to rattle the markets, most notably Canada’s market. At that time, market support levels were tested, and then broken, sending investors into a panic. While “a rising tide lifts all boats” such as when a broad bull run — a prolonged inclining market — pushes all stocks higher, there’s a heightened level of skill required to navigate the markets through volatility. Luckily for me, the Canadian investors I had followed since the age of 18 taught me not only how to invest through an upward period but also through an uncertain downward period. It finally seemed the right time to start on the Market Masters journey, to capture Canada’s top investors’ stories and the strategies they use to beat the market.
It was soon after that glimmer of inspiration, though, that I hit a brick wall. While I was eager to meet with and interview the chosen Market Masters for my book, only a small fraction of them actually replied to my initial letter in the mail and accepted the request for an interview. If I wanted to make this work, I thought, I would have to remain persistent. I sent another round of requests, this time via email. Only another small fraction of the Market Masters actually responded to me and agreed to the interview. For weeks to come, I would send follow-up emails, and then actually call the remaining Market Masters, to finally schedule all of the interviews. But then reality sank in once again, and my heart sank with it. I’d never interviewed anyone before.
So I researched and then practised various interview formats. I meticulously studied each and every Market Master, above and beyond what I already knew about them. I oriented the interview questions such that the actual conversations with each interviewee would be timeless, regardless of when the reader came across them, but also tailored the questions to highlight the areas that made each particular Market Master unique. I strived to elicit as many investing market strategies as I could from each of the Market Masters, to be certain that readers would actually be able to apply these strategies to make money in the markets. Also, I wanted to make sure that all of the interviews were entertaining and fun to read. I don’t want you to fall asleep, but rather to stay excitably awake in anticipation
of what you’ll learn or which Market Master you’ll hear from next. I want you to feel that you are actually there in the room with each and every Market Master, talking to him or her yourself.
Happily, all of the interviews flowed smoothly, for which I thank all of the Market Masters for being so accommodating, and my assistant, Elena Toukan, for being so thorough in transcribing. The interviews took place over a five-month period, after which point Elena transcribed and then consolidated all of the interviews into book format. Though the pile of interviews was a mess at first, the gradual finessing of the interviews and information over the next couple of months would evolve into the book you’re holding now, Market Masters.
When you embark on the journey that is Market Masters: Interviews with Canada’s Top Investors, you will be whisked away into a world and into the minds of Canada’s incredible investors. They will share with you their own unique and intriguing stories. They’ll divulge their investing philosophies, strategies, processes, successes, challenges, and outlooks. They will open your eyes to a market that you’ve never quite seen or experienced before. Your perspective will surely change and, in turn, your winnings in the markets will become more plentiful, predictable, and profitable. Whether you are a novice, intermediate, or advanced investor, I can guarantee that you will learn at least one new concept in this book that you can apply to the market to advance your portfolio. And if you’ve just started out in the market, then this book will be a treasure trove for you in that your investment journey will commence with an enviously advantageous foundation.
I hope you enjoy these exclusive conversations with Canada’s Market Masters. I certainly enjoyed meeting, interviewing, and learning from all of them. To complement the interviews I’ve provided pre-interview lessons that establish key concepts a reader should understand before they read through each conversation. This is especially important if you consider yourself a beginner investor. Also, these lessons are cumulative, so that as you progress through the book, your knowledge of these core concepts will grow, and each interview down the line will flow more easily than the one before. That is why I suggest that you read through Market Masters a second time to fully absorb all of the complex strategies that build on the core knowledge foundation developed on the first read through. You can also consult the glossary at the end of the book if you come upon a term you’re not sure about.
Finally, make sure to read all of the bonus material that I include at the end of the book. Especially the Collection of Master Keys section, which is a compilation of the most important things that I learned from each of the Market Masters. These Master Keys can help you unlock the market and open your world to tremendous money-making opportunities.
Health, happiness, and prosperity.
August 6, 2015
Robin Speziale is the national bestselling author of Market Masters, which is available at Chapters, Indigo, and Coles as well as Costco and Amazon.ca. He lives in Toronto, Ontario. Learn more about Market Masters.