The week ahead - 3rd April:RBI's monetary policy review in focus

RBI's monetary policy, industrial production data, the trend in global markets, investment by foreign portfolio investors (FPIs), the movement of rupee against the dollar, and crude oil price movement will dictate trend on the bourses in the next week. Indian stock market remains closed on Thursday, 2 April 2015, on account of Mahavir Jayanti. The stock market remains closed again on Friday, 3 April 2015, on account of Good Friday.

The Reserve Bank of India (RBI) announces the first bi-monthly Monetary Policy for 2015-16 on Tuesday, 7 April 2015. The RBI had surprised financial markets by announcing reduction in its benchmark lending rate viz. the repo rate by 25 basis points to 7.5% in an unscheduled monetary policy review on 4 March 2015. Earlier, the RBI had on 15 January 2015 announced a cut in the repo rate by 0.25% to 7.75%.

The government will unveil industrial production data for February 2015 on Friday, 10 April 2015.

The next major trigger for the Indian markets is Q4 results of India Inc. The Q4 results season starts during second week of April 2015.

World markets will on Monday, 6 April 2015 react to the influential monthly US nonfarm payroll data which the US government will announce on Friday, 3 April 2015. The US government will also announce the payroll report for March 2015 on Friday, 3 April 2015. US stock market remains closed on account of Good Friday.

In Europe, developments in Greece will be watched. Reforms proposed by Greece in return for urgently needed bailout cash will be reportedly scrutinised on Wednesday, 1 April 2015 during a Euro Working Group meeting – a group of Eurozone deputy finance officials. No final decision on the reforms will be made at the meeting but approval would be a major step. Reports indicated that a deal could be wrapped up between Greece and its creditors before the end of April 2015. However, Greece has to repay euro 460 million (333 million pound) to the International Monetary Fund by next Thursday, 9 April 2015 a payment that will be watched nervously if no deal is struck by then, reports added.

Galaxy Entertainment - Great potential Multibagger

The F&B food-service industry provides both direct and indirect employment to millions of Indians. Latest industry estimates place direct employment at 5 million workers. The industry also makes a significant contribution in terms of tax revenue to the government. It currently contributes $220 million to government coffers, which has the potential to reach $770 million, according to industry analysts. According to the National Restaurant Association of India (NRAI), the F&B foodservice industry is growing at a rate of 5-6% per annum with revenues amounting to $8.6 billion.



 Galaxy Entertainment is a concept stock from my side. There is nothing to suggest that the company should be trading in a multibagger perspective. But, yes, if someone takes a call on the core business, I feel this is one lifestyle product that should be part of one's portfolio. Pantaloon, at one point in time was available close to Rs 50-60 and it became a true multibagger.

Now the same promoter of that group is actually promoting this particular stock which was bought back in 2007 by other promoters of the company. The  firm changed submits mid 2007; one of the biggest and most experienced sorted out retailing chains, Pantaloon, purchased 15.73% stake in it(now it holds around 31% stake).It additionally amalgamated Pan India Restaurants with itself which had nourishment courts. Pantaloons is by Future Retail group  ( Biyani Family ). Mumbai-based land firm Phoenix Mills holds a 34 percent stake in Galaxy.

 
( Kishore Biyani from Future Group )


Galaxy Entertainment Corporation(GECL), a public limited company is India's premier professionaly managed leisure and entertainment organisation. It operates South Asia's largest state of the art premium family entertainment centre. This entertainment centre at Mumbai comprises Bowling and other game facility, bars and banquet halls.  The company owns Sports Bar, along with 38  resto-bars across the country.

SBX: The Company continues to enjoy the premium brand equity with SBX, as the expansion plan is on track and efforts to innovate and delight consumers continue. The Company continues to focus on increasing its reach geographically and tapping new areas with high potential.

 

Food Stop: The Food courts still play the role of mini anchor tenant in a mall. As shopping malls evolved, so did food courts. The latest designs are geared towards entertainment, relaxation and leisurely dining. As a result, people of all age now go to malls specifically for what food courts offer. Out of the total spend of any family shopping basket, the total spending on eating out has gone up significantly.

Shanghai Street: The Chinese QSR format has been a success with people of all ages. Low cost setup is an added advantage and offers faster roll out of the model.

Punjabi Adda: The Punjabi and North India food counter model designed for the food courts are tasting success across all the locations that they are being operated.

On words of Sunil Biyani:"The Indian food service industry is growing on the back of increasing income and changes in food consumption pattern.Besides, food courts are driving this industry as malls are expanding to smaller towns.Food-courts play the role of anchor tenant in a mall. Along with complimenting businesses such as books, games, fine dining restaurants and movies,they provide good recreational space to the customers.However, there is a huge vacuum and the latest offerings are geared towards entertainment, relaxation and leisure dining. We plan to open 22-24 food-courts this fiscal at an investment of 10 crore".It currently runs 11 food courts, and has tie-ups with various malls to operate and manage food outlets through a minimum-guarantee-plus-revenue-sharing model.

I was looking at it from a US economy perspective where these kinds of lifestyle sports bar businesses actually become multibaggers both in the US, UK and in Australia. There is nothing to suggest as of now to buy the stock from a short-term perspective. The stock can bore the investor for another one-two years but this is one stock which we would be definitely looking at because Pantaloon promotes the company and they will definitely chalk out some good plans.

If I see the Phoenix Mills property arrangement that they have got with the Ruia?s, all the future expansion will come to Galaxy Entertainment. Thus, this is one stock, which will definitely hog the limelight. I was just looking at their projection in terms of percentage to the total lifestyle business that the company can get. Even if I mark through a 4.5-5% potential for the company in the next five-six years, the stock can easily trade Rs 400-500 but that is a longer-term call.

So the scaling up of business is occurring at a fast speed.Its citing at a mcap of only 46crs.The organization's business of gaming and restaurants contributed 17crs on last fiscal.So around 2.7x of its trailing revenues.We are discussing a business with a lot of edge of safety.Valuation savvy too,at 2.7x trailing incomes ,in examination to the aforementioned deals,sounds really cheap.Scaling up of business with family of Biyani,nearly zero obligation organization with high negative working capital and heaps of money streams makes it a fascinating purchase at present levels.There's no recorded tantamount peer,hardly any coasting stock to discuss too.Even above normal numbers can make the stock move truly high.

Galaxy Entertainment is one stock, where I feel that the stock can easily trade in that Rs35-40 mark currently but if someone actually looks into the prospects of the business this is a true multibagger from a very longer-term perspective.

Cmp 22
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Buy Kitex Garments around 510, its base low. ( Results announced very early, much before the rest which is a positive sign of a good result )
At CMP of Rs.516.25, KGL is trading at 14.2x its FY16E EPS of Rs.38.3 which is at an attractive valuation (PEG of 0.3x only). With 25% sales CAGR (FY15E- FY18E), debt free status by FY18E, strong margin improvement (1000 basis points by FY18E) with sales from its own brand and licensing of private labels and strong return ratios (50% plus roe and 40% ROCE), We expect stock to trade at 20x its FY16E EPS of Rs.38.3. I assign a BUY rating on the stock with a price target of 700+ in next few  weeks which is more than 40% upside from current levels.

My Trading rules - Very Important for traders

Rules You must follow in in order to be a successful trader. 

Rule Number #1: You Must Keep A Trading Journal 

• Write down why did you enter the trade 
• Write down you emotions.
• Put all good trades in one column 
• Put all bad Trades in another
• Remember - A bad trade is not when your wrong about the direction of the trend. A bad trade is when you don't stick to your plan. 
• Name the bad Trade Column - " Demons To Kill "

Rule Number #2:  Plan to Trade and then Trade the Plan

• You must be disciplined - Even with a trading Plan. 
• Keep a well scheduled planned time to study the markets. 
• Keep A positive Attitude no matter how much you lose. 
• Master your emotions And you have Mastered the Zero Sum Game.

Rule Number # 3: Trade High Probability Traders

• A high probability trade is a trade where there's no doubt in your decision. 
• But even those trades dont always work out, So dont place a stake based on your confidence. 
• Have you ever taken a loss? Forget it quickly. Have you ever taken a profit? Forget it even quicker!  
• Dont let ego and greed inhabit clear thinking and hard work. 

Rule Number #4: Risk Management

•  Never ever without any expectations risk more then 5% on any given trade. 
• Only Trade with genuine risk capital, and be aware of the risk of losing. 
• Avoid taking small profits and big loses. 
• This will keep you in the game - Ignore these rules  and you will fail. 

Rule Number #5:

•  Read this page before Each and Every Trading Session. Print it out and stick it on the wall. 
•  And NEVER EVER GIVE UP! ~ You can do this ! 

Also one can read my other blog about Lifestyle and self development:

http://successinsmallefforts.blogspot.in/2014/11/1-exercise-exercise-is-huge.html

My Trading Lessons

• Trade what you see, Not what you dont see. 

• Prices will do what they do, its our job as traders not to predict anything - but react accordingly. 

• No ones opinion counts. The Markets will do what it will do. Just follow the prices and dont worry. 
• Its Important to not have one's opinion about the market get in the way of maximizing profits. Follow the trend! 

• My personal view is that the economy shoudnt influence by trading decisions. 

• I learned not to be swayed by other, but to trade my own view. 

• If everyone is worried about the same thing, it has most likely already prices into the stocks/ market it concerns. 

• Dont Listen to the news. The Market dosent care what you or anyone else thinks. 
• 
  
• Markets have and continue to outsmart some of the brightest. 
• 
  
• The most important thing ive learnt is that you need to trust yourself. 
• 
  
• Trading without a carefully  constructed plan is a sheer folly. 

• Markets are not casinos where you throw a quarter and expect luckily to get rich. Trading is a business and as a business you need to have a plan and follow it religisously. 

• Failure to plan is planning to fail. Stick to your trading plan - Know your rules and follow them. 
• Cut losses and admit defeat when appropriate. 

• know my plan before making any trade and where im going to exit if im wrong. 

• Risky and reward must be evaluated before every trade. Lost opportunities are easier to make up then lost capital. 

• I learnt that I am my worst enemy when it comes to trading. 

• Luck and randomness plays a larger role in outcomes then previously thought.

• Separate trading biases from longer term goals. Sometimes you really need to SET IT AND FORGET IT. 

My Trading rules, Read this every morning before trading 

Must Read ~ Highlights from Zurich Axioms.

RISK:  Worry is not a sickness, but a sign of health.  If you are not worried, you are not risking enough.

a.    Always play for meaningful stakes.

b.    Resist the allure of diversification.

GREED:  Always take your profit too soon.

a.    Decide in advance what gain you want from a venture, and when you get it, get out.

HOPE:  When the ship starts to sink, don’t pray.  Jump!

a.    Accept small losses cheerfully as a fact of life.

b.    Expect t o experience several while awaiting the large gain.

FORECASTS:  Human behavior cannot be predicted.  Distrust anyone who claims to know the future, however dimly.

PATTERNS:  Chaos is not dangerous until it begins to look orderly.

a.    Beware the historian’s trap.

b.    Beware the chartist’s illusion.

c.    Beware the correlation and causality delusions.

d.    Beware the gambler’s fallacy.

MOBILITY:  Avoid putting down roots.  They impede motion.

a.    Do not become trapped in a souring venture because of sentiments like loyalty and nostalgia.

b.    Never hesitate to abandon a venture if something more attractive comes into view.

INTUITION:  A hunch can be trusted if it can be explained.

a.    Never confuse a hunch with a hope.

RELIGION AND THE OCCULT:  It is unlikely that God’s plan for the universe includes making your rich (or famous, of successful …).

a.    If astrology worked, all astrologers would be rich.

b.    A superstition need not be exorcised.  It can be enjoyed, provided it is kept in its place.

OPTIMISM AND CONFIDENCE:  Optimism means expecting the best, but confidence means knowing how you will handle the worst.  Never make a move if you are merely optimistic.

CONSENSUS:  Disregard the majority opinion.  It is probably wrong.

a.    Never follow speculative fads.  Often, the best time to buy something is when nobody else wants it.

STUBBORNNESS:  If it doesn’t pay off the first time, forget it.

a.    Never try to save a Bad investment by “averaging down.”

PLANNING:  Long range plans engender the dangerous belief that the future is under control.  It is important never to take your own, or other people’s long range plans seriously.

a.    Shun long term investments.

multibagger ~ draft 1

Cords cable ~ 40% up in 2 days already,
Nicco parks
Shirpur gold - expecting gold to hit 1300-1700 within couple of years

Stock Recommendations updates

Stock Recommendations

Every New Long term Investor, Please look at this Link