Terminology

Glossary

Bear market

A sustained period of falling stock prices, typically a decline of 20% or more from recent highs across a major index.

Beta

A measure of a stock's volatility relative to the overall market. A beta of 1.0 means the stock moves with the market; above 1.0 is more volatile, below 1.0 is less.

Book value

The accounting value of a company's assets minus its liabilities, as shown on its balance sheet. Often compared to market value to identify undervalued stocks.

Bull market

A sustained period of rising stock prices, typically a gain of 20% or more from recent lows across a major index.

Dividend yield

A stock's annual dividend payment expressed as a percentage of its current share price. A $1 annual dividend on a $20 stock is a 5% dividend yield.

EBITDA

Earnings Before Interest, Taxes, Depreciation, and Amortization. A measure of operating profitability that excludes financing and accounting decisions.

EPS

Earnings Per Share. A company's net profit divided by the number of shares outstanding. Often the headline number in quarterly results.

Free cash flow

Cash a company generates from operations after capital expenditures. The cash actually available for dividends, buybacks, or debt repayment — usually a more honest measure than reported earnings.

Large cap

Companies with a market capitalization typically above $10 billion. On the TSX, this includes most banks, major insurers, and the largest energy and materials companies.

Market cap

The total value of a company's outstanding shares, calculated as share price multiplied by shares outstanding. The standard size measure for listed companies.

Mid cap

Companies with a market capitalization typically between $2 billion and $10 billion. Often considered a sweet spot for retail investors — large enough to be liquid, small enough to grow.

P/B ratio

Price-to-Book ratio. A stock's share price divided by its book value per share. Used to identify stocks trading below their accounting value.

P/E ratio

Price-to-Earnings ratio. A stock's share price divided by its earnings per share. The most common valuation shorthand — a quick measure of how much investors pay per dollar of earnings.

Position sizing

The discipline of deciding how much money to put into any single trade or investment. More important to long-term returns than picking the right stock.

Sector rotation

The market pattern where money moves from one industry sector to another as economic conditions change. Energy might lead in one phase, technology in another.

Short

Selling a stock you do not own (borrowed from a broker) in the expectation that you can buy it back later at a lower price. A bet that the stock will fall.

Small cap

Companies with a market capitalization typically below $2 billion. Where institutional research often stops looking and where retail investors can find asymmetric opportunities.

Stop loss

A predetermined price at which you sell a position to limit losses if the stock moves against you. A discipline rule, not a guarantee.

TSX

Toronto Stock Exchange. Canada's primary stock exchange, home to most major Canadian listed companies.

TSXV

TSX Venture Exchange. Canada's exchange for smaller, earlier-stage companies. Where most junior miners, small biotech, and emerging tech list.