Although it may seem hard to believe, there was a time in which the best index among the great europeans was the Ibex 35and in the that the american stock exchange had a bad behavior.
In the decade from 2000 to 2010, the cumulative return of the nasdaq composite index -including dividends – was 46%, despite the crisis of 2008compared with a loss of 16% of the EuroStoxx or 35% of the S&P 500 american.
In contrast, from 2010 to today, the Ibex 35 is the index with the worst performance among the european greatswhile the american stock exchange has had a behavior stellar. In this decade, the cumulative return of the nasdaq composite index -including dividends – has been -3%, compared to a gain of 68% of the EuroStoxx 50 or more 300% of the S&P 500 american.
What has happened to produce this offset so important in a decade? In my opinion, the main reasons are two:
• The real estate bubble of the 2000 driving the growth in sectors such as construction and real estate, but also the bank that, with the bursting of the bubble, has undergone a major correction of income and results that has not yet been completed.
• The growth of the digital economywith a double impact: on the one hand, scarce presence of Spanish companies in the sectors of digital and innovation; on the other, the great weight of the traditional industries, strongly affected by the disruptions that the digital economy it is causing.
Bearing in mind that this stock market performance in large part it is a reflection of the economic developments of the countrymeasures to improve this behavior should be aimed at improving the economic growth of Spain.
The evolution of the Ibex 35 is in large part a reflection of the economic developments of the country
Among others, I believe that measures should be taken aimed at:
• Reduction of the bureaucracy, including the speed of response.
• Flexibilization of the economy, with measures such as the homogenize standards among the autonomous communities, in order to have a single market and allow for the growth and development of the companies.
• Support to the entrepreneurship and to the entrepreneurs. When the majority of young people want to become officials, to the contrary of what happens in the U.S., where they aspire to be entrepreneurs, is that something is not working.
All of these measures are already known. Another thing is that it does not apply to, and really I hope that in a day not to come from the outside to imponérnoslasas in Portugal or in Greece.
***Antonio Blades is a member of Buy & Hold.