Today the Toronto Stock Exchange Index (TSX) hit 15,000 points, its highest number ever.

Even though 15,000 is purely a nominal number, skewed heavily by a small number of companies granted heavy weightings by the indexing formula, now is as good a time as any to reflect on the past 10 years.  

Why 10 years? Well, firstly that is as far back as my graph will go. More importantly, it is a period that encompasses two market cycles (the second is yet to be completed).

Looking at the far left In the above image, we can observe the effect of the tech bubble on the TSX index. A very quick boom was following by an equally quick bust. During the boom, the hot stock in the index was Nortel Networks. At one point, Nortel represented over 32%of the entire index. It was the market darling. It didn’t last. Today, Nortel trades at about 8 dollars, but it is really worth 80 cents after you account for the marketing wonders of stock splits (Nortel had a 1-for-10 reverse split).

Moving on over to the right, we can see that the current bull run does not appear to be too similar to previous bubble. Here we have a much slower and paced increase. There are however, some similarities.

Three companies: RIM, Encana & Potash Corp. account for over 20% of gains in the index over the past 5 years. The good news is that currently we have three firms leading the way, not one. There are also two sectors involved: Tech & Energy.  The last positive note is that the banking sector appears to be regaining steam. The big five Canadian banks haven’t been contributing much to the index the past few months as they struggled with write-offs from the credit collapse. If they continue to perform, it will provide a good hedge against a slowdown in Energy, assuming commodity prices begin to come back down to earth.

It is important to remember that the past will not reflect the future. Do not think that there is anything in the above chart that will hold the magic key to unlocking where the market will go next. Charts are only useful for giving us the ability to take a minute and reflect on how we got to where we are, so that our minds are a bit more focused as we decipher where it will go next.