Investment Style Guide

Investment Style Guide October 19, Dr. Edward Yardeni 16-972-7683 eyardeni@ Joe Abbott 732-497-36 jabbott@ Please visit our sites at blog. thinking outside the box

Table Of Contents Table Of Contents Index Price Performance: 1 Index Price Performance: 17 2 Index Price Performance: 16 3 Index Price Performance: 4 S&P Growth/Value Relative Price Performance S&P Pure G/V Relative Price Performance 6 Growth/Value Relative Forward Revenues & Earnings 7 Market Cap: S&P Earnings & Valuation 8 Market Cap: S&P, 4, 6 9- Market Cap: Russell vs. 11 Growth vs. Value: Revenue Squiggles 12 Growth vs. Value: Earnings Squiggles 13 Growth vs. Value: Profit Margins 14 Growth vs. Value: Earnings Growth Growth vs. Value: S&P Valuation 16-17 Growth vs. Value: Market Cap Shares Growth vs. Value: Net Revenue Revisions 19 Growth vs. Value: Net Earnings Revisions Growth vs. Value: Revenue Growth 21 Growth vs. Value: Earnings Growth 22 Russell Valuation SmallCap, Growth, Value 23 Valuation: SMidCap s Relative to LargeCap s 24 Forward Revenues & Earnings: SMidCap s Relative to LargeCap s 2 October 19, / Investment Style Guide

Figure 1. Index Price Performance: LARGECAP & SMIDCAP PERFORMANCE: (percent change ytd) S&P LargeCap (3.) S&P 4 MidCap (-1.) S&P 6 SmallCap (2.8) Russell LargeCap (3.3) Russell SmallCap (1.6) Latest data thru: /19/ - - - Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Source: Frank Russell Company, Haver Analytics, and Standard & Poor s Corporation. - 2 Figure 2. GROWTH & VALUE PERFORMANCE: (percent change ytd) Latest data thru: /19/ 2 S&P LargeCap Growth (8.7) S&P LargeCap Value (-1.9) S&P 4 MidCap Growth (-1.2) S&P 4 MidCap Value (-1.9) S&P 6 SmallCap Growth (6.3) S&P 6 SmallCap Value (-.6) - - - Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Source: Frank Russell Company, Haver Analytics, and Standard & Poor s Corporation. - Page 1 / October 19, / Investment Style Guide

2 Figure 3. Index Price Performance: 17 LARGECAP & SMIDCAP PERFORMANCE: 17 (percent change ytd) S&P LargeCap (19.4) S&P 4 MidCap (14.) S&P 6 SmallCap (11.7) Russell LargeCap (19.3) Russell SmallCap (13.1) 2 - Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec 17 Source: Frank Russell Company, Haver Analytics, and Standard & Poor s Corporation. - 3 27 24 21 12 9 6 3-3 -6 Figure 4. GROWTH & VALUE PERFORMANCE: 17 (percent change ytd) S&P LargeCap Growth (2.4) S&P LargeCap Value (12.6) S&P 4 MidCap Growth (.4) S&P 4 MidCap Value (.2) S&P 6 SmallCap Growth (13.) S&P 6 SmallCap Value (9.8) Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec 17 Source: Frank Russell Company, Haver Analytics, and Standard & Poor s Corporation. 3 27 24 21 12 9 6 3-3 -6 Page 2 / October 19, / Investment Style Guide

3 Figure. Index Price Performance: 16 LARGECAP & SMIDCAP PERFORMANCE: 16 (percent change ytd) 3 - - S&P LargeCap (9.) S&P 4 MidCap (.7) S&P 6 SmallCap (24.7) Russell LargeCap (9.7) Russell SmallCap (19.) Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec 16 Source: Frank Russell Company, Haver Analytics, and Standard & Poor s Corporation. - - 4 3 Figure 6. GROWTH & VALUE PERFORMANCE: 16 (percent change ytd) S&P LargeCap Growth (.1) S&P LargeCap Value (14.3) S&P 4 MidCap Growth (13.3) S&P 4 MidCap Value (24.) S&P 6 SmallCap Growth (.7) S&P 6 SmallCap Value (29.1) 4 3 - - - Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec 16 Source: Frank Russell Company, Haver Analytics, and Standard & Poor s Corporation. - Page 3 / October 19, / Investment Style Guide

Figure 7. Index Price Performance: LARGECAP & SMIDCAP PERFORMANCE: (percent change ytd) - - S&P LargeCap (-.7) S&P 4 MidCap (-3.7) S&P 6 SmallCap (-3.4) Russell LargeCap (-1.1) Russell SmallCap (-.7) - - - Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Source: Frank Russell Company, Haver Analytics, and Standard & Poor s Corporation. - Figure 8. GROWTH & VALUE PERFORMANCE: (percent change ytd) - - S&P LargeCap Growth (3.8) S&P LargeCap Value (-.6) S&P 4 MidCap Growth (.8) S&P 4 MidCap Value (-8.4) S&P 6 SmallCap Growth (1.) S&P 6 SmallCap Value (-8.1) - - - Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Source: Frank Russell Company, Haver Analytics, and Standard & Poor s Corporation. - Page 4 / October 19, / Investment Style Guide

.7 S&P Growth/Value Relative Price Performance Figure 9. S&P GROWTH vs VALUE RELATIVE TO S&P.7.6.6.6 Relative to S&P * Growth Value /19.6.....4.4.4 /19.4.3 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19.3 * Rising (falling) line indicates that the index is outperforming (underperforming) the S&P. Source: Standard & Poor s and Haver Analytics. 1.9 1.8 1.7 Figure. RELATIVE PRICE INDEX: S&P GROWTH & VALUE (Growth price index relative to Value price index) Rising line indicates that Growth is outperforming Value 1.9 1.8 1.7 1.6 1.6 1. /19 1. 1.4 1.4 1.3 1.3 1.2 1.2 1.1 1.1 1. 1..9.8 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 Source: Standard & Poor s Corporation and Haver Analytics..9.8 Page / October 19, / Investment Style Guide

4. 4. 3. 3. Figure 11. S&P Pure G/V Relative Price Performance RELATIVE PRICE INDEX: S&P PURE GROWTH & PURE VALUE (relative to S&P ) Rising line indicates that the index is outperforming the S&P Pure Growth relative to S&P Pure Value relative to S&P /19 4. 4. 3. 3. 2. /19 2. 2. 2. 1. 1. 1. 1.. 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 Source: Standard & Poor s Corporation and Haver Analytics.. 3. 3.2 3. Figure 12. RELATIVE PRICE INDEX: S&P PURE GROWTH & PURE VALUE (Pure Growth price index relative to Pure Value price index) Rising line indicates that Pure Growth is outperforming Pure Value 3. 3.2 3. 2.7 2.7 2. 2. 2.2 2.2 2. 2. 1.7 1. /19 1.7 1. 1.2 1.2 1..7 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 Source: Standard & Poor s Corporation and Haver Analytics. 1..7 Page 6 / October 19, / Investment Style Guide

Growth/Value Relative Forward Revenues & Earnings Figure 13..8.8 RELATIVE FORWARD REVENUES: S&P GROWTH & VALUE INDEX.7.7 Rising line indicates that Growth is outperforming Value.7.7.6 /4.6.6.6.....4.4.4.4.3 4 6 7 8 9 11 12 13 14 16 17 19.3 1.2 Figure 14. RELATIVE FORWARD EARNINGS: S&P GROWTH & VALUE INDEX 1.2 1.1 Rising line indicates that Growth is outperforming Value /4 1.1 1. 1..9.9.8.8.7.7.6 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19.6 Page 7 / October 19, / Investment Style Guide

6 6 4 4 Figure. Market Cap: S&P Earnings & Valuation S&P FORWARD EARNINGS PER SHARE (weekly, Jan 1999=) Forward Earnings* S&P LargeCap (339.3) S&P 4 MidCap (79.7) S&P 6 SmallCap (6.) 6 6 4 4 3 3 2 1999 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 /11 3 3 2 * 2-week forward consensus expected operating earnings per share. Time-weighted average of the current year s and next year s consensus forecast. 28 26 Figure 16. P/E RATIOS FOR S&P INDEXES* (weekly) S&P LargeCap (.8) 28 26 24 S&P 4 MidCap (.1) S&P 6 SmallCap (.7) 24 22 22 16 /12 16 14 14 12 12 8 1999 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 8 * Price divided by 2-week forward consensus expected operating earnings per share. Page 8 / October 19, / Investment Style Guide

Market Cap: S&P, 4, 6 3 28 2 Figure 17. S&P INDEXES (weekly) S&P LargeCap (2767.1) S&P 4 MidCap (71.3) S&P 6 SmallCap (96.4) /12 3 28 2 2 2 19 19 16 16 13 13 7 7 4 4 1999 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 Source: Standard & Poor s Corporation and Haver Analytics. 7 Figure. S&P INDEXES (weekly, yearly percent change) S&P LargeCap (8.4) S&P 4 MidCap (2.9) S&P 6 SmallCap (6.3) 7 2 2 /12-2 -2-6 7 8 9 11 12 13 14 16 17 19 Source: Standard & Poor s Corporation and Haver Analytics. - Page 9 / October 19, / Investment Style Guide

8 6 4 - -4-6 4 3 - - -3-4 8 6 4 - -4-6 6 4 3 - - -3-4 - Figure 17. S&P LARGECAP vs. S&P 4 MIDCAP (weekly, yearly percent change) 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 S&P vs. S&P 4 SPREAD (yearly percent change, basis points) /12 S&P LargeCap (8.4) S&P 4 MidCap (2.9) 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 S&P LARGECAP vs. S&P 6 SMALLCAP (yearly percent change) S&P Outperforms 4 S&P Underperforms 4 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 S&P vs. S&P 6 SPREAD (yearly percent change, basis points) Market Cap: S&P, 4, 6 S&P Outperforms 6 S&P Underperforms 6 S&P LargeCap (8.4) S&P 6 SmallCap (6.3) 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 /12 /12 /12 8 6 4 - -4-6 4 3 - - -3-4 8 6 4 - -4-6 6 4 3 - - -3-4 - Source: Standard & Poor s Corporation and Haver Analytics. Page / October 19, / Investment Style Guide

19 16 13 7 Figure. RUSSELL vs. RUSSELL (weekly, ratio scale) Market Cap: Russell vs. /12 19 16 13 7 4 4 Russell LargeCap (29.2) Russell SmallCap (46.7) 9 91 92 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 8 6 4 - -4-6 RUSSELL vs. RUSSELL (yearly percent change) Russell LargeCap (8.) Russell SmallCap (2.9) 9 91 92 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 /12 8 6 4 - -4-6 4 3 RUSSELL vs. RUSSELL SPREAD (yearly percent change, basis points) Russell Outperforms 4 3 - - -3-4 - 9 91 92 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 Source: Frank Russell Company and Haver Analytics. Russell Underperforms /12 - - -3-4 - Page 11 / October 19, / Investment Style Guide

Growth vs. Value: Revenue Squiggles 6 Figure 19. S&P CITIGROUP GROWTH REVENUES PER SHARE (analysts average forecasts, ratio scale) 6 Consensus Forecasts Annual estimates 19 /4 Forward revenues* 4 4 4 4 3 3 3 4 6 7 8 9 11 12 13 14 16 17 19 3 * Time-weighted average of consensus estimates for current year and next year. Monthly through December, then weekly. 8 8 7 Figure. S&P CITIGROUP VALUE REVENUES PER SHARE (analysts average forecasts, ratio scale) Consensus Forecasts Annual estimates Forward revenues* 19 /4 8 8 7 7 7 6 6 6 6 4 6 7 8 9 11 12 13 14 16 17 19 * Time-weighted average of consensus estimates for current year and next year. Monthly through December, then weekly. Page 12 / October 19, / Investment Style Guide

Growth vs. Value: Earnings Squiggles 9 7 Figure 21. S&P CITIGROUP GROWTH INDEX OPERATING EPS (analysts average forecasts, ratio scale) Consensus Forecasts Annual estimates 19 /4 9 7 6 Forward earnings* 6 4 4 3 3 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 * Time-weighted average of consensus estimates for current year and next year. Monthly through December, then weekly. 97 82 67 Figure 22. S&P CITIGROUP VALUE INDEX OPERATING EPS (analysts average forecasts, ratio scale) Consensus Forecasts Annual estimates Forward earnings* 19 /4 97 82 67 2 2 37 37 22 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 22 * Time-weighted average of consensus estimates for current year and next year. Monthly through December, then weekly. Page 13 / October 19, / Investment Style Guide

17 16 Growth vs. Value: Profit Margins Figure 23. S&P CITIGROUP GROWTH PROJECTED PROFIT MARGIN (using analysts average earnings and revenues forecasts) Consensus Forecasts Annual estimates Forward profit margin* (16.6) 19 /4 17 16 14 14 13 13 12 12 11 11 9 9 8 4 6 7 8 9 11 12 13 14 16 17 19 8 * Time-weighted average of the consensus estimates for current year and next year. Monthly through December, weekly thereafter. 12 Figure 24. S&P CITIGROUP VALUE PROJECTED PROFIT MARGIN (using analysts average earnings and revenues forecasts) 12 11 Consensus Forecasts Annual estimates Forward profit margin* (.2) 19 /4 11 9 9 8 8 7 7 6 6 4 6 7 8 9 11 12 13 14 16 17 19 * Time-weighted average of the consensus estimates for current year and next year. Monthly through December, weekly thereafter. Page 14 / October 19, / Investment Style Guide

Growth vs. Value: Earnings Growth 4 3 Figure 2. S&P CITIGROUP GROWTH vs. VALUE STEG* Growth (12.7) Value (.9) 4 3 /4 - - - 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19-2 2 LTEG* Growth (17.7) Value (.4) /4 3 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 3 /4 - - 4 3 Growth STEG* (12.7) LTEG* (17.7) 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 Value STEG* (.9) LTEG* (.4) /4 - - 4 3-9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 * STEG: 12-month forward consensus expected earnings growth. LTEG: -year forward consensus expected earnings growth. - Page / October 19, / Investment Style Guide

4 4 Figure 26. Growth vs. Value: S&P Valuation FORWARD P/E RATIOS FOR S&P CITIGROUP GROWTH vs. VALUE* (daily) 4 4 3 3 Growth (.9) Value (13.) 3 3 2 2 /19 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 * Price divided by 12-month (2-week) forward consensus expected operating earnings per share. Monthly data through December, daily thereafter. 3. 2.7 Figure 27. RELATIVE P/E: S&P GROWTH & VALUE* (Growth P/E relative to Value P/E) 3. 2.7 2. 2. 2.2 2.2 2. 2. 1.7 1.7 1. 1.2 /4 1. 1.2 1..7 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 1..7 * Price divided by 12-month (2-week) forward consensus expected operating earnings per share. Monthly data through December, weekly thereafter. Page 16 / October 19, / Investment Style Guide

2.8 2.6 2.4 2.2 Figure 28. Growth vs. Value: S&P Valuation PEG RATIOS FOR S&P CITIGROUP GROWTH vs. VALUE* Growth (1.14) Value (.91) 2.8 2.6 2.4 2.2 2. 2. 1.8 1.8 1.6 1.6 1.4 1.4 1.2 1. /4 1.2 1..8.6 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19.8.6 * Using -year forward consensus expected earnings growth and price divided by 12-month (2-week) forward consensus expected operating earnings per share. Monthly data through December, weekly thereafter. 2. 1.7 Figure 29. RELATIVE PEG: S&P GROWTH & VALUE* (Growth PEG relative to Value PEG) 2. 1.7 1. 1. 1.2 /4 1.2 1. 1..7.7...2 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19.2 * Price divided by 12-month (2-week) forward consensus expected operating earnings per share. Monthly data through December, weekly thereafter. Page 17 / October 19, / Investment Style Guide

6 Figure 3. Growth vs. Value: Market Cap Shares S&P CITIGROUP GROWTH INDEX (percent) 6 /4 4 4 4 4 3 3 Capitalization Share (4.7) Earnings Share* (4.7) 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 3 3 * Using consensus 12-month forward earnings forecasts. 8 Figure 31. S&P CITIGROUP VALUE INDEX (percent) 8 7 7 6 6 /4 4 3 Capitalization Share (4.3) Earnings Share* (4.3) 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 4 3 * Using consensus 12-month forward earnings forecasts. Page / October 19, / Investment Style Guide

3 Figure 32. Growth vs. Value: Net Revenue Revisions S&P CITIGROUP GROWTH INDEX NET REVENUE REVISIONS* 3 Sep - - - - -3-3 -4 - NERI Jul 9.23 Aug 4.21 Sep 3.19 6 7 8 9 11 12 13 14 16 17 19-4 - * Three-month moving average of the number of forward earnings estimates up less number of estimates down, expressed as a percentage of the total number of forward earnings estimates. 3 Figure 33. S&P CITIGROUP VALUE INDEX NET REVENUE REVISIONS* 3 Sep - - - - -3-3 -4 - NERI Jul 7.9 Aug 4.4 Sep 3. 6 7 8 9 11 12 13 14 16 17 19-4 - * Three-month moving average of the number of forward earnings estimates up less number of estimates down, expressed as a percentage of the total number of forward earnings estimates. Page 19 / October 19, / Investment Style Guide

3 Figure 34. Growth vs. Value: Net Earnings Revisions S&P CITIGROUP GROWTH INDEX NET EARNINGS REVISIONS* 3 Sep - - - - -3-3 -4 - NERI Jul 8.89 Aug 8.79 Sep 8.92 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19-4 - * Three-month moving average of the number of forward earnings estimates up less number of estimates down, expressed as a percentage of the total number of forward earnings estimates. 3 Figure 3. S&P CITIGROUP VALUE INDEX NET EARNINGS REVISIONS* 3 Sep - - - - -3-3 -4 - NERI Jul.83 Aug.12 Sep.34 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19-4 - * Three-month moving average of the number of forward earnings estimates up less number of estimates down, expressed as a percentage of the total number of forward earnings estimates. Page / October 19, / Investment Style Guide

3 2 Figure 36. Growth vs. Value: Revenue Growth S&P CITIGROUP GROWTH REVENUE GROWTH (analysts average forecasts, ratio scale) 3 2 8 11 12 13 Consensus Forecasts Annual estimates Forward revenues* 14 16 17 /4 19 - - - - 9 8 9 11 12 13 14 16 17 19 8 (9.6) 9 (-8.7) (11.4) 11 (14.2) 12 (6.6) 13 (4.2) 14 (8.) (.1) 16 (4.9) 17 (9.1) (11.9) 19 (8.) (7.8) Fwrd (8.3) - - - - Figure 37. S&P CITIGROUP VALUE REVENUE GROWTH (analysts average forecasts, ratio scale) 11 Consensus Forecasts Annual estimates Forward revenues* 17 /4 19 8 13 14 16 - - 9 12 8 9 11 12 13 14 16 17 19 8 (2.6) 9 (-.9) (7.7) 11 (7.4) 12 (-2.2) 13 (.4) 14 (.6) (-7.9) 16 (.2) 17 (.2) (6.8) 19 (4.1) (2.2) Fwrd (4.4) - - Page 21 / October 19, / Investment Style Guide

3 3 2 - - - - -2-3 Figure 38. S&P CITIGROUP GROWTH EARNINGS GROWTH (percent) Consensus Forecasts 8 9 11 12 13 8 9 11 12 13 14 16 17 19 Growth vs. Value: Earnings Growth 8 (7.9) 9 (-12.6) (29.1) 11 (.) 12 (11.8) 13 (9.1) 14 (14.) 14 Annual estimates Forward revenues* (9.8) 16 (7.1) 17 (14.6) (24.8) 19 (11.) (12.3) Fwrd (12.7) 16 17 19 /4 3 3 2 - - - - -2-3 7 6 4 Figure 39. S&P CITIGROUP VALUE EARNINGS GROWTH (percent) Consensus Forecasts Annual estimates Forward revenues* 7 6 4 3 3 9 - - -3-4 8 11 12 13 8 9 11 12 13 14 16 17 19 8 (-3.) 9 (23.) (6.3) 11 (.) 12 (1.) 13 (3.7) 14 (1.) 14 (-.6) 16 (-3.3) 17 (8.6) (21.) 19 (9.3) (8.8) Fwrd (.9) 16 17 19 /4 - - -3-4 Page 22 / October 19, / Investment Style Guide

4 3 Figure 4. Russell Valuation SmallCap, Growth, Value FORWARD P/E RATIOS FOR RUSSELL * (weekly) Russell (22.9) Russell Growth (3.) Russell Value (16.6) 4 3 3 3 2 /4 2 3 4 6 7 8 9 11 12 13 14 16 17 19 * Price divided by 12-month (2-week) forward consensus expected operating earnings per share. Monthly data through December, weekly thereafter. 3 3 Figure 41. FORWARD P/E RATIOS FOR US SMALLCAP * P/E capped at 3 due to extreme values. Russell (22.9) S&P 6 SmallCap (.7) 3 3 2 2 /4 1999 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 * Price divided by 12-month (2-week) forward consensus expected operating earnings per share. Monthly data through December, weekly thereafter. Page 23 / October 19, / Investment Style Guide

28 26 Figure 42. Valuation: SMidCap s Relative to LargeCap s FORWARD P/E RATIOS FOR S&P STOCK PRICE INDEXES* (daily) 28 26 24 22 S&P LargeCap (.8) S&P 4 MidCap (.1) S&P 6 SmallCap (.7) 24 22 16 /19 16 14 14 12 12 8 1999 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 8 * Daily stock price index divided by 2-week forward consensus expected operating earnings per share. Source: Thomson Reuters I/B/E/S and Standard & Poor s. 1.7 1.6 Figure 43. FORWARD P/E RATIO: S&P RELATIVE TO S&P 4 and S&P 6* (daily) 1.7 1.6 1. 1.4 S&P relative to S&P 4 (1.47) S&P relative to S&P 6 (1.) 1. 1.4 1.3 1.3 1.2 1.2 1.1 1. /19 1.1 1..9.9.8.7 1999 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19.8.7 * Price divided by 2-week forward consensus expected operating earnings per share. Page 24 / October 19, / Investment Style Guide

Forward Revenues & Earnings: SMidCap s Relative to LargeCap s 1 Figure 44. FORWARD REVENUES: S&P RELATIVE TO S&P 4 and S&P 6* (weekly, indexed to at beginning of data series on 1//4) 1 1 S&P relative to S&P 4 S&P relative to S&P 6 1 9 9 8 8 7 6 /4 7 6 4 6 7 8 9 11 12 13 14 16 17 19 1 Figure 4. FORWARD EARNINGS: S&P RELATIVE TO S&P 4 and S&P 6* (weekly, indexed to at beginning of data series on 1/21/1999) 1 9 S&P relative to S&P 4 S&P relative to S&P 6 9 8 8 7 7 6 /11 6 1999 1 2 3 4 6 7 8 9 11 12 13 14 16 17 19 Page 2 / October 19, / Investment Style Guide

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