No takers for IDBI bank’s Minerva theatre which ran Sholay for 5 straight years

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IDBI Bank has a piece of Bollywood’s 100-year old history, but no one seems to be interested in it. The only one who found it worthwhile is broke and has been ordered to shut down. The plot on which stood the Minerva theatre in South Mumbai, known as the Pride of Maharashtra, which crated history by running Amitabh Bachchan-starrer Sholay for five straight years, is now on the books of IDBI Bank. And the lender does not know what to do with it…

The state-run bank recently failed for the third time to sell the plot on Lamington Road, which has the potential to build and sell real estate for 40,000 square feet. That’s as much a surprise as it is a shock in a city where the fight for land can take many twists and turns. If a mouth-watering deal for real estate developers is going with no attention, what’s the catch?

Like an impediment for most other economic activities – it is an archaic law. A rule says that in any piece of land where a theatre once stood, there is no other option than building another theatre after razing the old one. “We have not decided what we will do with it,” says RM Malla, chairman and managing director at IDBI Bank. “It has to have a screen. Even a mini screen will do.”

For IDBI, it was funding an exotic idea that went sour.

In 2006, it lent about Rs 40 crore to Neville Tuli, the pioneer of art investing in India, through Osian’s Connoisseur’s Art, to build a theatre and an exhibition centre named OSIANAMA. The idea was to bring international movie experience to India. Reality did not unfold the way it was forecast to. The economy collapsed, value of assets tumbled and so did the fortune of Osian. All that stands now is a barren land with the once iconic structure pulled down.

Dues rose to Rs 84.8 crore in the period. First, IDBI decided to auction it at Rs 70 crore, that failed. Then, reduced the asking price to Rs 61 crore – still no takers.

Osian’s Connoisseurs of Art is having its own difficulties with the regulator Securities & Exchange Board of India (Sebi), which is directing it to wind up for violating securities laws.

Osian’s “is directed not to access the capital market and is further restrained and prohibited from buying, selling or otherwise dealing in the securities market till its collective investment schemes are wound up and all the monies mobilised through them are refunded to the investors,” the Sebi order said.

Planning a residential tower, along with a multiplex and a retail component, may not be a good idea elsewhere, but won’t find takers in the elitist South Mumbai.

FinMin makes case for rating upgrade with Fitch

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The finance ministry on Friday made a strong case for rating upgrade of the Indian economy by global agency Fitch Ratings on the back of increasing investments, declining import of gold and the government’s commitment to fiscal prudence.

The issue of rating upgrade was raised by the ministry’s officials at a meeting with the representatives of Fitch in New Delhi. The meeting was attended by Department of Economic Affairs Secretary Arvind Mayaram, among others.

“Fitch raised concerns on how deficits will be met and how the government will be able to meet revenue targets. We said we are confident, gold import is declining and investment in our economy is going to start increasing,” a top  official said.

The official further said the finance ministry also expressed confidence that the current account deficit would come down, as oil prices were stable and the rupee had been range bound.

“The Cabinet Committee on Investment (CCI) has approved projects worth Rs 70,000 crore in three months time. These are infrastructure projects and will have positive impact on cement industry and steel industry,” the official added.

The government had set up CCI, under Prime Minister Manmohan Singh, in December last year to accord fast track clearances to mega projects.

The Ministry officials also impressed upon the rating agency the resolve of the government to follow the path of financial prudence and bring down the fiscal deficit to 3 per cent of GDP by 2016-17.

Finance Minister P Chidambaram in 2013-14 Budget has proposed to bring down the fiscal deficit to 4.8 per cent from 5.2 per cent in 2012-13.

Besides, several reforms initiative like liberalising FDI norms for various other sectors, including multi-brand retail, was undertaken by the government to promote growth and investment.

The government also undertook partial decontrol of diesel and capped subsidised LPG cylinders, in a bid to check the rising subsidy bill.

Another rating agency Standard & Poor’s is scheduled to visit India on April 25.

Both S&P and Fitch had earlier threatened to downgrade India’s credit rating as an aftermath of the expansionary policy which led to a rising fiscal deficit. The fiscal deficit had touched a high of 5.8 per cent in 2011-12.

S&P rates India as ‘BBB-‘, lowest in the investment grade, with a negative outlook. Any further downgrade will push India’s rating to the junk status, making it difficult and costlier for Indian entities to borrow funds overseas.

After lowering India’s credit outlook to negative, Fitch had in August last year said the possibility of downgrading the country’s sovereign rating is more than 50 per cent in the next 12-24 months unless reforms are carried out.

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To Get Rich in Three Easy Steps

smart-profit-in-stock-marketPeople don’t believe how simple it is to accumulate a significant amount of wealth, but it really is quite easy. All you need is a bit of discipline and to know the three steps necessary anyone can take to grow a significant net worth. The steps are:

 

1. Spend less than you earn. This is THE key to getting rich. Said another way, save a portion of all you make.

To spend less than you earn, you may need to earn more or spend less.

2. Invest your savings regularly in good, solid investments. I like index funds.

3. Do this for a long time, letting the power of time and compounding work for you.

 

That’s it.

Yes, it’s that easy.

 

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How Banks Make Money

Yes, the government prints our businesses paper money. But thats just a little small fraction of the money in use. Most of the funds in state economies is made when banks write it directly into their customers’ accounts as a result of thin air as bank loans.

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You earn Rs.10,000 and put it in the bank. And then…

 

 

 

 

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The bank keeps RS.1000 in its RBI(Reserve bank of India) account …

 

This is the “reserve,” which the bank uses when customers withdraw funds. As a rule, depositors don’t take out more than 10% of the money they have on deposit on any given day.

 

 

 

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Then loans Susie Rs.9,000, at interest.

 

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Susie deposits the Rs.9,000 in her bank.

That bank keeps 10% (Rs.900) in reserve and loans Joe Rs.8,100, at interest.

 

 

 

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See how it all adds up—for the banks.

You now have Rs,10,000 in your account. Susie has Rs.9,000 in hers. Joe has Rs.8,100. 

There’s now Rs.27,100 total in accounts that you and Susie and Joe can spend, and it all came from your Rs.10,000 deposit. The banks have created an additional Rs17,100 by loaning it into existence.

 

 

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Imagine this money trick over and over.

If you do this operation 50 times, that Rs.10,000 turns into Rs.99500.25—Rs.88500.25 in loans, and your original Rs.10,000.

 

 

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Mad math: If those loans are for one year at 10% interest, the banks will make Rs.8800.53. If they’d only been able to loan your Rs.10,000, they’d make Rs.1000.

 

 

 

Truth of Option Trade: 10 Ways to Move From Risk to Profits

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Stock options are not lottery tickets, chips in a casino, or a path to easy street. They are tools for the transference of risk from one person to the other. When trading options you must understand where the risk lies in your specific option play and what  the odds are of you winning. The Black-Scholes option pricing model does an excellent job of pricing in known variables of time and volatility into options. Implied volatility does not predict direction of the movement it predicts the amount of movement. The edge lies in three places #1 following the chart and trading in the direction of the trend #2 managing your risk on every trade allowing your wins to be bigger than your losses in the long term, and #3 having the discipline to follow your trading plan. Option trading is no different than any other kind of trading, just more leverage and speed of percentage movement.

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  1. The first question to ask in any option trade is how much of my capital could I lose in the worst case scenario not how much can I make.
  2. Long options are tools that can be used to create asymmetric trades with a built in downside and unlimited upside.
  3. Short options should only be sold when the probabilities are deeply in your favor that they will expire worthless, also a small hedge can pay for itself in the long run.
  4. Understand that in long options you have to overcome the time priced into the premium to be profitable even if you are right on the direction of the move.
  5. Long  weekly deep-in-the-money options can be used like stock with much less out lay of capital.
  6. The reason that deeper in the money options have so little time and volatility priced in is becasue you are ensuring someones profits in that stock. That is where the risk is:intrinsic value, and that risk is on the buyer.
  7. When you buy out-of-the-money options understand that you must be right about direction, time period of move, and amount of move to make money. Also understand this is already priced in.
  8. When trading a high volatility event that price move will be priced into the option, after the event the option price will remove that volatility value and the option value will collapse. You can only make money through those events with options if the increase in intrinsic value increases enough to replace the vega value that comes out.
  9. Only trade in options with high volume so you do not lose a large amount of money on the bid/ask spread when entering and exiting trades.
  10. When used correctly options can be tools for managing risk, used incorrectly they can blow up your account. I suggest never risking more than 1% of your trading capital on any one option trade.

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TRY TO KNOW SOMETHING ABOUT MARKET…

market is always rightRemember that the stock market is always right and price is the only reality in trading. In case if you want to make money in any market, you need to mirror what the market is doing. On the other hand if the market is going down and you are long, the market is right and you are wrong. Moreover if the stock market is going up and you are short, the market is right and you are wrong.

Other things being equal in stature, the longer you stay right with the stock market, the more money you will make. On the other side of the coin the longer you stay wrong with the stock market, the more money you will lose.

 

 

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In general every market or stock that goes up will go down and most markets or stocks that have gone down, will go up. The general thumb rule in this regard is the more extreme the move up or down, the more extreme the movement in the opposite direction once the trend changes. This is also termed as “the trend always changes rule.

 

 

 

 

 

looking for resone

In case if you are looking for “reasons” that stocks or markets make large directional moves, you will probably never know for certain. Since we are pretty much dealing with perception of markets-not necessarily reality, you are wasting your time looking for the many reasons markets move.

A huge blunder most investors make is assuming that stock markets are rational or that they are capable of ascertaining why markets do anything. To make a profit trading, it is only mandatory to know that markets are moving – not why they are moving. In an ideal scenario stock market winners only care about direction and duration, while market losers are obsessed with the whys.

 

 

newsStock markets normally move in advance of news or supportive fundamentals – sometimes months in advance. In case if you wait to invest until it is totally clear to you why a stock or a market is moving, you have to assume that others have done the same thing and you may be too late.

You required to get positioned before the largest directional trend move takes place. Theoretically speaking the market reaction to good or bad news in a bull market will be positive more often than not. On the other hand the market reaction to good or bad news in a bear market will be negative more often than not.