Ibex March 2013: The Big Move Looms as the Hare Bolts

Ibex 35: March 2013, the month the hare bolted before the big move

March 2013 was the month the Ibex 35 rose with Cyprus burning alongside. The index entered spring stalled, stuck in the middle range, and closed it flirting with the 8,600 points that six months earlier seemed a joke. The contradiction was so great it was distilled into a domestic saying: when the big move is about to appear, the hare has just bolted. In translation: the major upward move comes just after the quick money has left. Or so claim those who have been waiting for the surge for months.

The Cyprus Bailout That Didn't Sink the Ibex

On March 16, 2013, the Eurogroup and the IMF finalized a Cypriot bailout that dipped into savers' deposits. The Nicosia Chamber rejected it, and a departure from the euro was openly discussed. The Spanish stock market, against all odds, looked upwards. One analyst summarized it wryly: "Cyprus rejects the budget, now they're openly talking about leaving the euro, and the market is going up." The bewilderment was understandable.

The bailout details only worsened over the days. At the Bank of Cyprus, a haircut of up to 60% for depositors was discussed, and Laiki, being liquidated, left its depositors with a bite close to 80%. With those figures on the table, the Ibex closing the month higher demanded an explanation beyond euphoria. The circulating one was less epic: someone sufficiently large was moving the index at will, and the small players were just watching the candles. The rest, they said, was choreography.

From "Weak Index" to the Big Move: The Hares' Prophecy

The dominant narrative for weeks was one of a ceiling. Warnings were issued about a selective index that was "weak, more or less stuck in the same spot," with an uncomfortable argument: since September 2012, barely 500 points had been gained, very little for so much good news. Volatility typical of exhaustion zones was noted, a MACD and RSI turning downwards, and resistance painted at 2.40 euros for some unknown stock. The conclusion was always the same: it could rise, but I wouldn't go long.

On the other side, the other camp. Optimistic targets had been written for months: first 8,600, then 9,400, and even 9,700. The argument was that the Ibex was lagging behind its European peers and was just "getting its act together." When the index surpassed 8,500, the same person warning of a ceiling admitted that the idea, which months ago seemed like an orgasm, now sent shivers. It's the classic trap: the price reaches the target, and then you no longer know whether to celebrate or run.

Acerinox vs. Arcelor: The Numbers That Did Add Up

Amidst the macro noise, part of the analysis focused on the only measurable thing: balance sheets. The comparison between steel companies occupied several sessions. Acerinox presented net debt of 564 million and an operating cash flow in 2012 that stood at 565 million, almost identical to 2007. Arcelor carried 16.64 billion in net debt and had seen its operating cash flow fall from 16.532 billion to 5.294 billion between those same years. The reading was simple: the former withstands demand downturns better; the latter appreciates more if the cycle favors it.

With that logic, Repsol, ACS, Bayer, and especially the so-called chicharros (small, leveraged, and volatile stocks that served as a thermometer for risk appetite) were also discussed. The recurring warning was that sharp drops in highly indebted companies had always preceded index collapses. It didn't always happen. But the one who warned twice sometimes got it right.

The "Tortuous Metamorphosis" of Hybrids

Another front of the month was that of entities carrying hybrid instruments worth 6.5 billion euros, which were announced to be converted into shares, described wryly as "tortuous." Reverse stock splits and capital increases were added to the mix, leaving more than one with four spreadsheets open and the feeling that the numbers were not a plan but a joke. "At times I wonder if all this isn't a joke by the best comedian of all time," wrote a veteran investor.

The conversation drifted to the usual: that the management of a company not owning the business has a price. The argument was that a salaried manager without shares gets paid the same if the ship sinks slowly, and that true discipline only arrives when remuneration is via dividends. Meanwhile, "black swans" accumulated on the horizon, and the full ballet was yet to be seen.

Four Excel Sheets and Investor Insomnia

It wasn't all charts. The month also brought the most sincere confession of the period: someone with years in the market announced their retirement, not for losing money, but for earning it badly. "I have too hard a time and am always nervous, regardless of the money I make, my mind doesn't switch off and I can't stop crunching numbers," they wrote. With their life sorted and no need to get into trouble, they preferred the urge to not look at quotes over the daily wear and tear.

It tells well a problem that almost no one talks about: the psychological cost of trading. You can win and still get sick. The recommendation that began to be repeated was to develop a system before automating it, to understand the logic before buying it. Another, in contrast, summarized their method with brutal honesty: "The stock that gives me the most joy is the first one I bought, with no analysis, purely on a hunch. It was a vision." Luck and technique will eternally coexist in this business.

The Pope, PRISA, and Paco González: The Month's Scraps

March 2013 also brought the election of Pope Francis, and with it the accusations he had carried for years about alleged collaboration with the Argentine dictatorship, claims that this article limits itself to reflecting as what they are: allegations never judicially confirmed. Cypriot politics and the Vatican soap opera served, according to the most ironic, to cover up their own miseries.

On the corporate front, a seemingly minor piece of news stood out: Paco González won the lawsuit against Cadena Ser, with compensation of 2.4 million euros. The calculation made was eloquent: that figure was equivalent to 1.6% of PRISA's capitalization, which was around 148.86 million. Put into perspective, a labor dispute weighed as much as a corner of the media group. And on top of that, with the procedural reform, the company could appeal without depositing the money. Another lesson in justice and liquidity for the average saver.

Where Did the Debate Go

The month closed with the feeling that the Ibex and the news lived on different planets. Those who called for caution still saw a ceiling; those who awaited the big move, a springboard. The index, meanwhile, did whatever it pleased, leaving both open-mouthed. And so April began, with the promise that the selective index would touch nine thousand: another prophecy, made with the same conviction with which the previous month it was sworn that this was a ceiling. Whoever refines their forecast too much will pay for it, and whoever doesn't write it will always seem foolish. Time will tell.