Barrick Gold then had the largest index weight for six days in January and February 2009: Jan.23, 2009 (ABX 4.71%, RY 4.34%) as its stock price surged over $50 on record strength in gold bullion prices.  However the stock peaked long before the top in gold prices as its excessive debt load to buy marginal gold properties in South America was too much for the company to bear.  It had also sold forward some of its gold at much lower than market prices and had to pay billions of dollars to unwind those hedges.  The stock began a retreat in late 2011 that saw its price fall more than 80% to its recent low and push its index ranking down to the #30 position.

Research in Motion (now ‘Blackberry’, named after its key line of smartphones) was the next non-bank stock to hit the #1 spot on the TSX Index.  With over 80% market share in smartphones and a notably happy customer in the U.S. president, RIM rose to a peak of over $140 per share in 2009, boasting a market capitalization of over US$80 billion.  Then along came a little product called the ‘iPhone’ which, along with the Android phones, ended up being ‘Blackberry killers’ and sent the stock on a five-year tailspin which saw its market share of smartphones fall below 2%.  While the company appears to have survived and executed a turnaround based on its software, security and business enterprise sales, the market capitalization has fallen to a mere $4 billion and its index rank is out of the Top 60.

Finally we have the latest victim of the ‘largest TSX stock curse’, Valeant Pharmaceuticals.  Following the merger with Biovail in 2010, CEO Michael Pearson lead the company on an acquisition binge that saw sales, profits and market cap grow at unprecedented rates, pushing Valeant to be the largest index weight in July of this year (VRX 6.07%, RY 6.06%).  The ‘curse’ would not be contained however.  From Hilary Clinton ‘tweeting’ about going after the architects of the outrageous drug price increases to a short seller’s report calling Valeant the ‘Enron of the pharmaceutical industry’, the stock has seen its price hacked down by over 60% during the past month and its ranking in the index has fallen out of the Top 10.  Once again, the brief period where a ‘non-bank’ stock has topped the list of the biggest companies in the index, is over!  Let investors beware the next time we see a Canadian, non-bank stock market success story.  If history is any guide, the good times don’t last!

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