Is "cheap" good, when you're making losses? In general, people like cheap. As in "inexpensive", not "shoddy". Prices can get lower for many reasons. Competition can force price cuts — either you compete or customers leave you. You can get greater productivity — producing more at the same price means you can charge lesser. You can lock in the price of your raw materials and retain customer prices at the same level.

Let's look at a few industries where, over a long period, prices haven't changed or have actually come down.

The most obvious is electronics. About 15 years ago, I paid Rs. 65,000 for a mid-level computer, and I'd probably pay about Rs. 25,000 today. Prices of chips fall, even as they add more computing power. Even as prices have dropped, profits of semiconductor companies have stayed high; volumes and efficiencies more than made up for increase in raw material costs or labour.

The car market has also managed to maintain prices, for the most part. A Hyundai Accent (one of the

On Friday, 20^th April 2012, two mysterious events occurred on the National Stock Exchange (NSE). In the morning, Infosys futures crashed over 20% and quickly recovered back to the original level. In the afternoon, just before 2:30pm, Nifty futures crashed 6.7% from the 5,350 level back down to 5,000, and then nearly instantly recovered back to 5200. Both crashes were blamed on algorithmic trading.

Program trading has been blamed for "flash crashes" for nearly 25 years. In October 1987, US markets took a nose dive on a single day and for years, the blame game went on with the primary suspect being program trades. This is understandable. Since a computer can trade with much faster speed than a human, it can set off a spiralling price change by continuously buying or selling with no real control. Why then, should we even allow algorithmic trading?

Program trading can provide for great trading opportunities with less human error. Much of the arbitrage that used to happen in Indian markets

Much has already been written about a new proposal in the Budget, where a private company is required to "justify" the valuation it receives when an Indian resident investor buys shares in it. This doesn't apply to public companies, or those in which the investment is by a venture capital fund. It also doesn't apply if you buy shares at "par" — that is, at the face value of the shares.

When a company is created, shares are issued to the initial investors at face value, in proportion to their investment. For example, take a company started with 100,000 rupees, with two founders putting in Rs. 60,000 and Rs. 40,000. Each will get 6,000 and 4,000 will get shares of Rs. 10 face value, respectively, for a total of 10,000 shares.

The founders work for 6 months and build a prototype for a software to revolutionize online payments. They demonstrate this, with a business plan, to an angel investor, asking for Rs. 20 lakh as an investment to hire people, buy some equipment and for marketing.

At