Ibex 35 2013: Gamesa Soars Sevenfold, Bankia Stars in Both Rises and Falls

Ibex 35 2013: Gamesa x7 and Bankia on Both Sides of the Year

December 2013 closed with the IBEX 35 hovering around 9,750 points, the level indicated by the derivatives expiry. The expiry auction and a soaring DAX served as fuel. The question on everyone's screen was always the same: will it hold until the close, or is this a trap for the unwary? No one had the answer, though everyone had an opinion.

The Year-End Rally: From 9,619 to 9,750 Points

The final days of December were an exercise in patience. The IBEX peine at 9,700, and the derivatives expiry pointed directly to 9,750. Some closed short positions at 9,619, recovering losses, while others preferred not to move for antiestéticar of their positions being eaten up by the rise. Euphoria was rife in the media, certainly, but volume didn't keep pace: a rise without volume is the stock market equivalent of applause in the desert.

The ECB was the other player in the drama. Any appearance by its officials rearranged the schedule: if they spoke at 13:45, the market stood still until then. A detail that sums up the entire year: the stock market stopped trading on fundamentals and started trading on statements.

Bankia: The Only Stock in the Top Rises and Falls in the Same Year

Bankia was the most talked-about case. According to a forum user, orders crossed at 1.07 euros during the auction, and five million shares traded in just two minutes. The most seasoned investors had been accumulating stock since the 6,250-point mark, reminding themselves daily that the bank had been rescued with public money. The paradox, as forum users concluded, was that Bankia would end 2013 as the only company in the Spanish selective index present simultaneously on the podium for the biggest falls and the biggest rises of the year.

Those who bought low got a good chunk; those who bought high got the garnish. The same stock, two opposite biographies.

Gamesa and the x7 Nobody Saw Coming

The stock of the year, according to the balance made in the thread, was Gamesa. It appreciated by around x7 during 2013, a figure that, as was commented, isn't seen every year. Although some forum users recalled that Janus had accurately predicted it, no analysis had nailed it beforehand.

Meanwhile, the usual penny stocks —Ercros at 0.482, Ezentis, Liberbank— continued their personal roller coaster.

ACS, or How to Stop Being a Spanish Company

The other story of the year was written by ACS. Its latest accounts showed a figure that was repeated in all conversations: a reduction in net debt of 3.9 billion euros in a single year. But the standout figure was in the geographical breakdown. Only 15% of sales came from Spain; 11% from the rest of Europe; 38% from Asia-Pacific, and 35% from America. The company had become, as was said, an international giant trading at a P/E of 11, with only its name remaining Spanish.

The S&P 500, Bitcoin, and the Coal Nobody Wanted

Across the Atlantic, the S&P 500 closed the year with 29% gains and a record high of 1,842 points, according to the cited data. Analysts were already releasing their forecasts for 2014: most bet on closing between 1,900 and 1,950 points, while the most skeptical —those at Deutsche Bank— anticipated a flat year.

China provided the discordant note: it prohibited financial institutions from operating with bitcoins, as reported by the economic press.

In coal, one forum user's thesis defended the opposite: stocks like Arch Coal were so devalued relative to their theoretical value that there was talk of multiplying by four from current prices. It was a minority and highly debated bet: the discussion dragged on between those who saw opportunity and those who saw a falling knife.

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The Average Investor: 68% Success Rate and a 25% Return

One of the most honest year-end reviews was posted by a forum user who only traded the IBEX. His result: 68% wins and 32% losses, with a return of almost 25% for the year, equivalent to 18% of his monthly salary. His conclusion was as simple as it was uncomfortable: enter with the same amount of money in each stock, set fundamental stop-losses, and don't get carried away by euphoria or pessimism.

The other side of the coin was presented by someone who admitted to being down -20% in two different positions and still holding for tax reasons, waiting for better times.

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With the index at 9,750, Gamesa multiplied by seven, and Bankia collecting medals in both opposite categories, the question left hanging at the year's close had no easy answer: if the rally was built on liquidity and not on profits, what would happen the day the ECB stopped watering the garden? Nobody knew. Everyone had a theory. And that's where the debate ended.