Epstein Secrets

is still 200bps higher than its average of 390bps. 10 15 20 25 30 35 0 5 LTM PE (lhs) Source: S&P, FRB, Deutsche Bank Implied ERP (rhs) Avg PE = 15.9 Overstated EPS from inflation distortions 0% 2% 4% 6% 8% 10% 12% A -15 forward PE wouldn't be threatened until 10yr yields are wel

h the ability of that offered nominal return to adjust for inflation variations over the long term. Date 23 August 2013 David Bianco Strategist Ju Wang it S&P 500 Key Forecasts Price 1660 Next 5%+ move Uncertain 2013E Year-end Target EPS Target P/E Current P/E DPS Priya Hariani Strategist

implied ERP 10 15 20 25 30 35 0 5 Recession Implied ERP (rhs) Avg ERP ex 1975-82 = 3.5% Trailing PE (lhs) EFTA01476109 Avg ERP = 4% Avg PE = 15.9 Red dot shows implied ERP on 10yr TIPS yield of 1.5% instead of 0.28% currently Source: Deutsche Bank Research, IBES, S&P Overstated EPS f

.8 21.7 Equa lweight 2015 2016 PE PE Underweight Health Care Providers & Services 2015 2016 PE PE 16.3 15.5 David Bianco,(1) 212 250 8169 Ju Wang, (1) 212 250 7911 Winnie Nip (1) 415 617 3297 EFTA01476128 8 December 2015 World Outlook 2016: Managing with less liquidity European Equity Str

15 20 25 30 35 0 5 Recession Implied ERP (rhs) Avg ERP ex 1975-82 = 3.5% Source: Deutsche Bank, S&P, IBES Trailing PE (lhs) Avg ERP = 4% Avg PE = 15.9 Overstated EPS from inflation distortions Low offered ERP contributes to crash Long-term growth optimism Return to normal 0% 2% 4%

anco Strategist (+1) 212 250-8169 [email protected] Winnie Nip Strategist (+1) 415 617-3297 [email protected] S&P 500 Key Forecasts Price Ju Wang Strategist (+1) 212 250-7911 [email protected] 2089.17 Next 5%+ move Balanced Risk 2014 Year-end Target 2058.90 EPS Target P/E Current P/E E