# What are your 50 year stocks?



## Assetologist (Apr 19, 2009)

I am going to purchase a few stocks in my kid's account (in trust) with the premise that they will hold and DRIP these shares for the next 50 years.

Have a look at this Dividend Reinvestment Calculator

I am looking for blue-chip, dividend growing stocks backed by a business which has proven it can adapt as the world changes.

My choices right now are ABT and JNJ.

Other suggestions welcomed.

Cheers


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## plen (Nov 18, 2010)

50 years is a massive timeline.

The only thing I would count on would be something like Hillenbrand, Inc


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## HaroldCrump (Jun 10, 2009)

Companies go through major changes in 50 years, assuming they manage to stock around.
How about simply holding a DJIA and the TSX index fund/ETF?
Add in an emerging market ETF as well for flavour.
With re-invested dividends, it should work out ok.
Otherwise, you are placing long term bets on a small set of stocks.
We all know about that American woman that donated $7M of ABT stock after like 80 years.
That's one person and one stock - happens only once in a century I suppose.


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## Homerhomer (Oct 18, 2010)

50 years is a bit too long ;-). 

I recently purchased ABT so obviously I like it despite everything that is going on in the industry.

I am currently strongly considering ading MCD, another dividend artistocrat which IMO is reasonably priced.

I think currently canadian banks aren't very expensive.

There are plenty of companies you may want to condsider, problem is currently they are darn expensive:
BCE, CNR, CVE, ENB, FTS, SLF just to name a few in Canada, 
CAT, KO, COP, INTC (not too expensive and now grows dividend every year since 03), WMT, ....

All these companies are on my watch list for dips, and would be happy to keep them for a long time (just a tad short of 50 years though ;-)
JMO ;-)


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## andrewf (Mar 1, 2010)

This is just nuts.


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## humble_pie (Jun 7, 2009)

assetologist a tiny thought comes to mind ... aren't you as a parent obligated to report the dividends received in your children's trust account as taxable in your own hand ?

if so, and if you DRIP these dividends, surely the constant bookkeeping, ie having to constantly adjust the cost base, would get to be a burden.

also, what would be the tax treatment of US dividends paid into a canadian trust account for minor children. If these were subject to NR withholding tax, would you be able to claim this.


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## peterk (May 16, 2010)

I'd say Exxon, JNJ, Walmart, McDonalds, Visa, Caterpillar would be the ones I'd pick for a "buy and forget" portfolio...


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## larry81 (Nov 22, 2010)

With a 50years investing timeframe you simply cant go wrong following a mix of broad index, ex the classic XIC, VTI, VEA, VWO.

I would also be tempted to throw a technology ETF in the mix too


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## Rysto (Nov 22, 2010)

A better question, I think, is that what stocks would people have considered 50 years stocks in 1961. How well would those stocks have done?

Go with some index funds instead.


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## daddybigbucks (Jan 30, 2011)

Transcanada pipeline TRP for me.

5% yield, they have 10 year of contracts signed and sealed.

Thats my 20 year drip for my kids RESP.


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## Kim (Jan 10, 2011)

I like McDonalds for a long term option...


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## Argonaut (Dec 7, 2010)

If you put money into an index fund for 50 years, even with a small MER of 0.2%, you will LOSE over 10% of your initial investment just in fees. You would be better off buying the top holdings in whatever index you're tracking.

50 year stocks: For Canada it's CN Rail and for the USA it's Coca-Cola. I can guarantee you there will still be railroads and Coke in 50 years. The rest I'm not so sure about, and it requires at least a little more active management. I know I may sound like a broken record on this one, but JNJ is a broken company right now.


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## Assetologist (Apr 19, 2009)

*Grace Groner*

Thanks for the replies. I may wait a few years until my kid's can open TFSAs and purchase shares for the long run.

My question was inspired by the Grace Groner story, can it be repeated?


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## andrewf (Mar 1, 2010)

Argonaut said:


> If you put money into an index fund for 50 years, even with a small MER of 0.2%, you will LOSE over 10% of your initial investment just in fees. You would be better off buying the top holdings in whatever index you're tracking.
> 
> 50 year stocks: For Canada it's CN Rail and for the USA it's Coca-Cola. I can guarantee you there will still be railroads and Coke in 50 years. The rest I'm not so sure about, and it requires at least a little more active management. I know I may sound like a broken record on this one, but JNJ is a broken company right now.


You're alleging that the fund provides no value. If you're not going to be intervening in the account, the fund will likely outperform whatever is currently the top holding. Imagine you said this when Nortel was the biggest Canadian firm.


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## OptsyEagle (Nov 29, 2009)

Buy some diversified ETFs instead of individual stocks and your odds of success will increase dramatically. I think some allow DRIPs.

As for the Grace Groner, what you are not reading are the 86,482 articles on the other people that did similar things, that failed miserably.


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## larry81 (Nov 22, 2010)

Argonaut said:


> If you put money into an index fund for 50 years, even with a small MER of 0.2%, you will LOSE over 10% of your initial investment just in fees. You would be better off buying the top holdings in whatever index you're tracking.


Can you imagine people holding 2,50 MER% funds for a similar period ?


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## Argonaut (Dec 7, 2010)

andrewf said:


> You're alleging that the fund provides no value. If you're not going to be intervening in the account, the fund will likely outperform whatever is currently the top holding. Imagine you said this when Nortel was the biggest Canadian firm.


I said top holding*s*. Nortel is an absurd example and index investors, should they have been more plentiful back then, would have gotten burned just as hard or harder on that crash. Nothing stopping anyone from looking at the TSX 60 and choosing 5-10 companies in different sectors. Boom, you have yourself a diversified portfolio for the Canadian equity aspect of your assets without any MERs.

Not that I'm saying ETFs don't have their place, it's just that with a 50 year strategy you don't want to get killed by fees.


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## Doug Out West (Apr 25, 2010)

BAM- Brookfield Asset. I think I've owned it 15 years in RRSP. Book is $6k market is $36k. I sold some along way as it was becoming a huge % of total. Wish I haven't.

Whatever Brookfield management does I do. BAM sold a lot of its holdings in Brookfield homes at $40 , so did I. BAM bought conv preferreds in BHS so did I conversion at $7 now at $15.


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## Belguy (May 24, 2010)

Low fee, broad based, capped ETF's such as XIC are always a safer bet than investing in individual stocks such as Enron, Nortel etc.

"We believe the most effective way to stock market riches is to deploy your capital throughout the public fixed income and equity markets in a broadly diversified manner designed to capture a global capital market rate of return. With the proper time horizon and discipline you can reach your financial goals and outperform most investors with less risk."

Buy, hold, and rebalance a diversified portfolio of low fee, broad based ETF's.

Such a portfolio will be far more diversified than a portfolio of a handful or two individual stocks most of which are probably Canadian.

"When you read about the latest individual investment suggestions, see the investment predictions on the cover of the latest financial periodical, watch the talking heads on BNN, CNBC etc., and listen to your friends and neighbours and fellow CMF participants boast about their latest great investment ideas, you will understand that they are speculating instead of investing."

You know a better way. You have 'The Answer'.

"Don't focus on what you cannot control. You cannot predict the occurrence of an event like the mortgage crisis, the sovereign debt crisis, or an oil spill in the Gulf of Mexico etc. etc. However, you can control your costs, diversify properly, establish the right asset allocation for your particular circumstances, and maintain the discipline to stay the course through all market conditions by investing in a portfolio of low fee, broad based, index products and trading only to rebalance that portfolio over time whenever required."

That, my friends, is 'The Answer'. 

Reference: 'The Investment Answer'--"The Five Key Decisions Every Investor Needs to Make" by Daniel Goldie, CFA, CFP and Gordon Murray.


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## dogcom (May 23, 2009)

I also agree with holding a ETF for 50 years because even the best of stocks have gone to the dust bin over time. I mean look at Laidlaw and that big funeral home, I forgot the name that went under. Or in the US look at Lehman Brothers, I am sure many did not expect that to go under 10 years ago.

I am sure if you go into the past you could make a rock solid fund of great stocks in their day that you would think could last 50 years that are now gone.


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## steve41 (Apr 18, 2009)

Well, I for one, am sure happy my grandfather brought me those 100 shares in CBW.... (Consolidated Buggy Whips) Great move Gramps!


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## warp (Sep 4, 2010)

Doug Out West said:


> BAM- Brookfield Asset. I think I've owned it 15 years in RRSP. Book is $6k market is $36k. I sold some along way as it was becoming a huge % of total. Wish I haven't.
> 
> Whatever Brookfield management does I do. BAM sold a lot of its holdings in Brookfield homes at $40 , so did I. BAM bought conv preferreds in BHS so did I conversion at $7 now at $15.



I have to admit that BAM always seems to do well , if you just hold onto it.

I own some BAM prefs....and was looking at Brookfield Properties, and Brookfield Asset management last year, but passed.

That turned out to be a mistake.

They are smart operators, world wide.

Question now is,,,What can we buy NOW that will increase 6 fold in 15 years?


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## humble_pie (Jun 7, 2009)

assetolo surely you of all people do not wish to become an eventual 75-year-old ancestor who still controls like an iron despot, while the middle-aged offspring in their late 40s are forced to come crawling every single month to receive *their* *trust* *income* in the form of an infantilizing handout.

wouldn't it be better to invest in their childhood surroundings & education while they are young, so they can grow up to become independent autonomous beings ...


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## Assetologist (Apr 19, 2009)

humble_pie said:


> assetolo surely you of all people do not wish to become an eventual 75-year-old ancestor who still controls like an iron despot, while the middle-aged offspring in their late 40s are forced to come crawling every single month to receive *their* *trust* *income* in the form of an infantilizing handout.
> 
> wouldn't it be better to invest in their childhood surroundings & education while they are young, so they can grow up to become independent autonomous beings ...


I agree that trust funds are most likely damaging to personal growth.

We are very cognizant of providing enabling opportunities for our kids which will hopefully allow them to become happy, productive and independent citizens of the world.

The trust accounts (which both kids have) only exist because they are not yet 18 years old. Once they are 18 the money will be theirs. I set them up because we all learn better by playing with real toys/money.......

My point with this exercise was to also teach the value of patience and compounding. In an ideal world they would have long-term stocks in their account which demonstrate appreciation in value and in dividend payout.

When they assume full control of the accounts they can decide for themselves how to manage the investments but hopefully by then then have developed a basic financial acumen.


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## OptsyEagle (Nov 29, 2009)

Assetologist said:


> My point with this exercise was to also teach the value of patience and compounding. In an ideal world they would have long-term stocks in their account which demonstrate appreciation in value and in dividend payout.
> 
> When they assume full control of the accounts they can decide for themselves how to manage the investments but hopefully by then then have developed a basic financial acumen.


I bet all it teaches them is that patience and compounding is best when someone else does it for them. I suspect all it will teach them is how great it is to get their hands on a big whack of cash.


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## warp (Sep 4, 2010)

If you teach your kids about money, personal finance, saving and investing, etc, WHILE you also set up accounts for them.....I feel its a win/win situation.

This is exactly what I am doing.

If you work your whole life,,,who else would you want to leave your assets to, other than your children and other young family members?

I have started an "investment school" at my home for my nephews and nieces. I am teaching them about education, working , saving and investing.

We had a nice two hour "class" two days ago, where I began to teach them about Asset allocation, what bonds are, how they work, the diff bonds availiable, the rating system, why you buy them, etc etc.
Next I will move on to equities.

All this was new to them, even though they have been to university!!
What I am trying to get thru to them is that investing is not a get rich quick scheme, but a slow progression thru life that leads to financial freedom.

Several others are just finishing high school, ( including my son), and I will start with them soon.

I am learning that this is one of the best things you can ever do for any young people you care about,

Once they get the hang of things , I intend to give each a "gift", so that they can involve themselves more with assets they actually own and control.( with help and direction from me).


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## Toronto.gal (Jan 8, 2010)

How great of you to be educating & helping young people navigate the world of finance & more; a duty to do so with one's own children, but you're certainly doing so much more. Your lessons/influence will surely make a difference in their lives. Great post!


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## Doug Out West (Apr 25, 2010)

Doug Out West said:


> BAM- Brookfield Asset. I think I've owned it 15 years in RRSP. Book is $6k market is $36k. I sold some along way as it was becoming a huge % of total. Wish I haven't.
> 
> Whatever Brookfield management does I do. BAM sold a lot of its holdings in Brookfield homes at $40 , so did I. BAM bought conv preferreds in BHS so did I conversion at $7 now at $15.


Looked back and its more like 11 years. Had bought lots of the Broffman companies before and did pretty well, Hees, edper , pargar something.

So when I started SDRRSP a started with a chuck of Brascan.


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## Assetologist (Apr 19, 2009)

OptsyEagle said:


> I bet all it teaches them is that patience and compounding is best when someone else does it for them. I suspect all it will teach them is how great it is to get their hands on a big whack of cash.


That's the cynical view and certainly possible but I have to hope that the other lessons of life we have tried to impart upon our kids prevail.

I can't help but do this though as I would regret not taking the time ( and a little cash) to try and teach them the time value of money.


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## OhGreatGuru (May 24, 2009)

*What are your 50 year stocks?*

1.Cold Fusion
2. Teleportation
3.Moon Real Estate

Seriously, who knows? 50 years is too long in our society. Too many technological changes, too many corporate failures, too many paradigm changes.

50 years ago who would have predicted GM would file for bankruptcy?

50 years ago Big Blue was the dominant force in computing devices, programming, and services. A futurist might have predicted the development of desk-top computers, but at the time who would have been able to predict what companies would be created and go on to dominate the business in the High Tech boom?

How would you have bought a piece of the Internet in 1961?

50 years ago Ontario Hydro was forecasting cheap electricity forever from nuclear plants, and encouraging the construction of electrically heated homes. Look how well that has worked out lately.

If I had to choose though, I would say railways, utilities, and CDN banks.


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## Sampson (Apr 3, 2009)

OhGreatGuru said:


> 1.Cold Fusion


You too?!? 

My 50 year payout is coming soon, only another 28 years to go. Incredible to think the discover was only 22 years ago. At least their patent hasn't worn out yet.


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## warp (Sep 4, 2010)

OhGreatGuru said:


> *What are your 50 year stocks?*
> 
> 
> 50 years ago Ontario Hydro was forecasting cheap electricity forever from nuclear plants, and encouraging the construction of electrically heated homes.  Look how well that has worked out lately.
> ...


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## OhGreatGuru (May 24, 2009)

warp said:


> OhGreatGuru said:
> 
> 
> > *What are your 50 year stocks?*
> ...


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## Larry6417 (Jan 27, 2010)

OhGreatGuru said:


> warp said:
> 
> 
> > As opposed to the geniuses in the private sector who brought us Nortel; the Tech Crash generally; mortgage-backed securities; oil boom & bust cycles; etc. And that's not even mentioning the outright frauds and Ponzi schemes a la Enron & Madoff.
> ...


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## Larry6417 (Jan 27, 2010)

It blows me away that some people actually answered the OP with stock picks for the next 50 years. Bernstein mentioned an interesting statistic in his book _Investors' Manifesto_: 2 of 3 stocks in the index underperform the index. Therefore, an investor's baseline risk of underperforming the index by picking a single stock to hold for the next 50 years is two thirds.

The stock picks here are a great argument *against* what the OP intends to do. In fifty years, China and India will almost certainly have larger economies than the U.S., but not one person chose a company from Chindia. The future corporate titans will likely come from those 2 countries. 

Most chose well-known large caps. I'm not against investing in large caps, but large companies run into the law of large numbers. Increasing revenue 10% for a $100 billion dollar company is harder than doing so for a $100 million dollar company i.e. growth frequently slows. Investing in an index makes infinitely more sense than buying a large cap well past its peak growth.

About 50 years ago, the "nifty fifty" was a set of 50 stocks that could be held forever (according to Wall Street). Some are still around while others have gone bankrupt (e.g. Emery Air freight) while others have fallen on hard times even though they're still around e.g. Kodak. See http://en.wikipedia.org/wiki/Nifty_Fifty

Just buy the index.


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## warp (Sep 4, 2010)

OhGreatGuru said:


> warp said:
> 
> 
> > As opposed to the geniuses in the private sector who brought us Nortel; the Tech Crash generally; mortgage-backed securities; oil boom & bust cycles; etc. And that's not even mentioning the outright frauds and Ponzi schemes a la Enron & Madoff.
> ...


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## warp (Sep 4, 2010)

Also in terms of the "nifty fifty" stocks from 50 years ago.

I looked at the list,,,and even though some have gone BK..( or been bought out/ taken over)...it would be very interesting to see what an investent would have returned if you had of bought all 50 stocks back then and held till now.

Just a quick glance make me believe that the returns would have been somewhere between good and great!

Anyone care to do an analysis...I dont have the time right now.


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## peterk (May 16, 2010)

After reading some comment I'd like to change my advice from individual picks to simply indexing. Way safer. 
Does any have any data showing how the Nifty Fifty has performed over the last 50 years compared to the index? I think that would be very neat/eye-opening/educational comparison to see.

Edit: You beat me to it Warp!


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## dogcom (May 23, 2009)

I did find this story and it goes up until 2001.
http://economics-files.pomona.edu/GarySmith/Nifty50/Nifty50.html


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## warp (Sep 4, 2010)

dogcom said:


> I did find this story and it goes up until 2001.
> http://economics-files.pomona.edu/GarySmith/Nifty50/Nifty50.html


Thanks for that DOGCOM>

What is interesting right away is the sky high P/E ratios of some of those nifty-fifty stocks! Many were over 50!!

I wouldnt be caught dead, then or now, buying any of those with high P/E's

I actually do ,right now, own a bunch of those stocks.....
Baxter, JNJ, Eli Lilly, GE, and Dow among them!!

The second thing is that of these stocks, the ones that did best, and beat the S&P were all those with the lowest P/E 's to start with .
The graph at the bottom clearly shows this!

Also the S&P P/E at 19.2 was lower than any of the stocks in the nifty fifty except ITT.


WELL...is there a lesson here that we can learn about which stocks to invest in today??


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## I'm Howard (Oct 13, 2010)

MDY is probably the best choice for a long term hold, but add about 15% GLD or Royal Precious Metals, 15% CDZ, 15% XCB, 15% XRB,10% 3 year GIC.

Yahoo allows you to chart and to compare assets.


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## HaroldCrump (Jun 10, 2009)

There was an article in Bloomberg Business Week a few months ago, about the "sub-emerging" economies.
What we love calling "emerging" economies have already emerged - China, India, South Korea, etc.
Brazil, it can be argued, still has lots of growth to go.
Anyway, this article focused on countries that (they claimed) are sub-emerging i.e. in a similar state that India, South Korea and maybe China were 15 - 20 years ago.
They profiled 5 countries (from what I recall) - Peru, Angola, Ghana, Bangladesh, and Egypt (this article is obviously from before the recent events there).
It is very hard (if not impossible) for individual investors to directly invest in companies of these countries.
There are a small set of high-end mutual funds/hedge funds that pick selected companies from such countries and invest in them.
Most of the picks they listed seemed to be contruction, engineering, health care and consumer goods companies.

May be something for you to consider putting a small portion of your 50-year portfolio into these funds.


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## james4beach (Nov 15, 2012)

I collected the "best" individual stocks mentioned in this old thread from 2011. I'm showing results from 2011 to end of 2020, the 10 years following the recommendation

10 years is a good period to look at.

The American portfolio (link to portfolio visualizer): ABT, JNJ, MCD, CAT, KO, COP, INTC, WMT, XOM, V

S&P 500 index was: 13.72% CAGR
Stock picks returned: 12.81% CAGR -- underperformed the index

The Canadian portfolio (link to portfolio visualizer): BCE, CNR, CVE, ENB, FTS, SLF, TRP, BAM.A

TSX index was: 5.67% CAGR
Stock picks returns: 9.31% CAGR -- outperformed the index

~ ~ ~ ~ ~

The US picks underperformed the index, and the Canadian picks outperformed. Neat!


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## james4beach (Nov 15, 2012)

james4beach said:


> I collected the "best" individual stocks mentioned in this old thread from 2011. I'm showing results from 2011 to end of 2020, the 10 years following the recommendation
> . . .
> 
> The Canadian portfolio (link to portfolio visualizer): BCE, CNR, CVE, ENB, FTS, SLF, TRP, BAM.A
> ...


From this really old thread, these were the Canadian stock picks and they worked out very well! It seems that CMF'ers in 2011 came up with some good picks.

I have large positions in many of those myself. I'm curious, how would people "adjust" that Canadian stock portfolio?

I'd vote for adding RY or TD


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## MrBlackhill (Jun 10, 2020)

I would add MRU, TIH, NA. I'd add ENGH and/or CSU.

I'd pair FTS with AQN, BCE with T, CNR with CP, SLF with IFC.

I'd remove ENB. I'm not too much into CVE and TRP, I'd remove them.

I think CSU, ENGH, BCE, T, FTS, AQN, CNR, CP, IFC, MRU, TIH, NA, RY, BAM-A are all good choices.


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