Inflation and government spending remain high.

Fisher's famous formula, which describes the relationship between money and commodity prices, has obvious problems.

What's wrong?

The formula:

Quantity of goods * Price of goods = Velocity of money * Money

In this formula, we have a description of a linear scalar process that never exists in real life, and we have a measurement that can only be applied when we calculate the average velocity over an indefinite period of time.

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A contradictory situation has developed at RAO UES of Russia.

On one hand the operational income is decreasing, but on another hand, company has a good cash reserve and receives good interest income.

In any case, the point of the valuation is the free cash flow and potential dividends that can be paid.

And here we also face a contradiction, since the cash reserve allows us to pay large dividends, and the strict FCF shows beautiful numbers, but the real dividends are small, and the latest FCF for the 24th year ... Читать дальше »

Weekly inflation spins around an average line in 10 percent.

M2 monetary aggregate slightly lows to 18,7 %.

Gazprom Neft has had good times lately when oil money raised dividends.

Figure 1.

But times are changing, and simple linear approximations may turn out to be incorrect.

Figure 2.

The current stock market valuation pitch seems too optimistic.

The dollar exchange rate has a perfect relationship with the broad monetary base.

Yandex is not doing very well, despite analysts' songs.

Figure 1.

A huge part of Yandex's cash flow comes from stock options that the company pays to employees.

As a sense it is loans that company takes not in bank but from its staffs.  

And a loan cannot be an income.

But okay, let's consider it income.

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Weekly inflation returns to the average, which is about 10%.

Government spending remains at a high level, which hinders a reduction in the key rate.

It doesn't look like the company is doing well.