A Canadian investor can buy Royal Bank, Apple or an S&P 500 ETF in a few clicks. An online brokerage makes it feel as though every listed company is available. It isn’t. If the company you want trades mainly in Zurich, Tokyo, London or Frankfurt, you may find a US ADR, an OTC quotation, a secondary listing or no North American line at all. Direct access to the foreign exchange opens up more companies, along with a longer list of complications.

This is the last of four articles on how stock markets work. TSX vs NYSE vs Nasdaq covered where stocks trade, S&P 500 vs Nasdaq vs Dow Jones vs TSX covered what indices measure, and OTC Stocks, ADRs and Pink Sheets covered depositary receipts. This one covers buying ordinary shares on the foreign exchange itself.

Financial headlines tell you the Dow gained 300 points, the Nasdaq fell 2%, the S&P 500 hit another record and the TSX outperformed Wall Street. Each sentence describes a different group of companies, counted by different rules. A 300-point move in the Dow isn’t comparable with a 300-point move in the S&P 500. A rising Nasdaq-100 doesn’t mean the average American stock is doing well. A strong TSX doesn’t mean Canada’s economy is beating the United States.

Stock market indices are how we summarize markets, and index funds are how most of us own them. When you buy an index ETF, you’re buying a methodology: which companies, in what proportions, measured in which currency. This is the second article in the Understanding Stock Markets series. It covers what the major benchmarks measure, why they diverge and what that means for a Canadian portfolio.

From a single self-directed brokerage account, a Canadian can buy Royal Bank, Berkshire Hathaway, Microsoft, Shopify or a small mining company in the same afternoon. Those securities sit on different exchanges, meet different listing standards and, in some cases, trade in different currencies. The investor sees a ticker and a buy button. Behind it sits a market structure most people never look at.

For the large, liquid companies that fill most portfolios, that structure matters less than most explainers imply. It isn’t irrelevant, though. Canadian stock exchanges and their American counterparts differ in which companies they list, how easily shares change hands, which currency a trade settles in and how much disclosure you can count on. This is the first article in a four-part series, Understanding Stock Markets. It covers where your stock is listed, what separates the major North American exchanges, and which differences deserve your attention.

Prem Watsa has been called Canada’s Warren Buffett for so long that the label has become part of Fairfax Financial’s identity. The comparison isn’t careless. Both men built holding companies around property-and-casualty insurance, used the premiums their insurers collect to fund long-term investing, wrote candid annual letters, and judged themselves by growth in book value per share over decades. By Fairfax’s own accounting, book value per share has compounded at 18.7% a year since 1985, including dividends. Few Canadian companies can point to anything like that.

The record isn’t a straight line, though. Fairfax compounded spectacularly in the 1980s and 1990s, made a fortune on credit-default swaps in 2007 and 2008, and then spent most of 2011 to 2020 growing book value at roughly 2.4% a year while hedging a market that kept rising. From 2021 to 2025 book value per share compounded at 22.5% a year, the combined ratio fell below 94%, and the stock went from about 0.7 times book value (end of 2020) to about 1.5 times (end of 2025).

That recovery changes the question. Whether Watsa can repair Fairfax has been answered. What remains is whether the repaired Fairfax can earn enough on its equity to justify about 1.2 times book value. My answer is that it probably can, with a margin of safety thin enough that I’d call the stock a modest buy rather than a bargain.

Canadian utility stocks usually get filed under a single heading, boring dividend investments, and that heading hides more than it reveals. Owning Hydro One means owning an Ontario transmission and distribution monopoly with no power plants and one regulator. Owning Fortis means owning a collection of regulated utilities spread across Canada and the United States, with most of the assets south of the border. Owning Capital Power or TransAlta means accepting real exposure to the price of electricity. Brookfield Renewable is a global renewable investment platform that happens to pay a distribution. AltaGas is partly a regulated gas utility and partly a midstream and propane export business. Enbridge, which most Canadians would include on any list of dependable dividend payers, is not really a utility at all.