Stock market promoters talk billions and a bit of history and geology explains Canadian resource stock investing. The essence Canadian resource stocks includes billions to discuss but first; Canada does not have an OTC or Grey Market. Instead we borrow access from our friendly southern neighbor for the OTC, Grey Market and other stock markets based in the U.S.A.
Stock Markets Build Wealth, lesson 8
Research and common sense both informs and protects investors. Too many Canadian investors readily deal in questionable, bad or just plain awful investments. We also have many homegrown examples of promoters both creating and pushing hopeless investments on the gullible.
Canada has a full share of iffy promoters. Depending on your point of view, Canadian stock promoters rank as among the best or worst anywhere. A certain sort make ample use of easy access to the American system.
Over the years this easy access has allowed many promoters, with questionable deals, to take advantage of the naïve and uninformed. The shares they sell are not even good wallpaper! In fact it is not even wallpaper at all, as investors most likely never even see paper in this digital age!
It seems a sector of any population will pay good money for hollow promises. Buying this stuff is easy; selling to get out of awful deals…much more difficult, or impossible. Total losses are common! Just avoid this junk. Protect yourself and your money, just don’t buy. As usual in investing, doing your own basic homework will keep you safe.
Now let’s talk about the very real billions in the Canadian stock market! There are many excellent opportunities for investors in Canadian stocks.
There is an easy way to understand the real Canadian market and stocks. With a wee dollop of history and a smidgen of geology we can make a light easy meal of a few facts. Digest them and you can easily grasp the basics of investing in the many Canadian resource related stocks.
Consider Canada as an immense reservoir of natural resources. Canada holds an absolutely enormous amount of natural wealth of almost every conceivable type and description. Oil, diamonds, fertilizer and many other resources, Canada seems to have it all! That resource base plays a huge part in making Canada the 11th largest economy in the world!
The history of developing that vast natural resource treasure trove, and respect for the natural environment, permeates every part of Canada. Canadian environmental views range across the full spectrum. We only agree on one thing. The environment is important.
Even acknowledging that there are real environmental and political issues; understand that resources are the base of the Canadian economy. Mining of many minerals occurs across Canada. Exploiting deposits of potash, iron ore, diamonds, gold and many more mineral deposits creates thousands of jobs and generates a huge economic impact. Most of it from sites far from urban centers.
Energy deposits include coal and a Western Sedimentary Basin rich in petroleum including natural gas, oil and the oil sands product, bitumen. The huge deposits give Canada total reserves second only to Saudi Arabia. And reserves now being discovered and developed promise centuries of future production.
The historical development of financing for extraction of resources created a favorable environment that developed the strong Canadian banks and banking system.
Oil and gas, mining and finance are the big sectors of the Canadian investment market. Use those basic facts to understand the nature of the Canadian investment market and the many opportunities found in stocks listed on the TSX and TSX Venture Exchanges.
That foundation of understanding allows investors to see Canadian resource stocks as basic to the economy. That aids understanding of all Canadian market listings as well as the opportunities and challenges they present to an investor.
Other sectors such as technology, consumer related retail, services and manufacturing are very important to the modern Canadian economy. However, many sectors are completely unrelated to resources and without any direct historical link.
Still, those more recently developed sectors built on an economic base historically established by resource companies. That and the financing needed to develop the natural resource wealth, are the established foundation of the Canadian economy. All other sectors of the economy have built on and prospered from that substantial base.
The Canadian economy and society grew from that background. Now it is a modern, urban and technologically advanced society. Even many contemporary young urban Canadians do not know that men mucking in the mud for resource riches were the historical base of their economy! Contemporary urban dwellers living in a one screen digital world can easily miss or simply be unaware of such basics.
But now we know! And we can lever that knowledge to understand the Canadian stock market. Both the resource based sectors and the powerful finance sector sit like a foundation under all other market sectors in Canada. That foundation affects all sectors and the individual stocks in those sectors.
Applying the process of identifying the economic base of a market, serves as a good way to understand an economy and the society being built on that base. That can help us understand much about any nation as they all develop on their own unique economic base. Using that straightforward technique can help you develop an understanding of any market, or any nation, in the world.
Next time we look at the history and forces in play that built the Toronto Stock Exchange, the predecessor of today’s TSX.
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Introduction to stock Markets Build Wealth Lesson 1
Sorting US and Canadian markets Lesson 2
Canadian investment market base Lesson 3
Canada’s one trading place Lesson 4
Bedrock of Toronto Stock Exchange Lesson 5
Venture Exchange creates opportunities Lesson 6
The Other venture exchange – Alberta Lesson 7
Stock market promoter billions Lesson 8
American OTC stock markets Lesson 9
Alternate market trading choices Lesson 10
Have a prosperous investor day!
Bryan
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© 2013-19 Bryan Kelly
Bryan Kelly uses White Top Investor to share his extensive investment knowledge and experience. He introduces strategies like the No-Worry Investor and the Index-Plus Layered Strategy, which encourage investor growth through personalized investment plans aligned with their unique circumstances and goals. By helping investors make money work for them and avoid common pitfalls, he aims to support the individual growth of wealth-building investors who can create secure, comfortable financial independence. With decades of experience, Bryan is committed to making stock market success accessible to anyone ready to take control of their financial future. The About page shares the story of his daughter's question that inspired the creation of White Top Investor.
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