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-44- Since inception with these managers, Davis, Palmer & Biggs' performance has been superior to the market averages, while Thorndike, Doran, Paine & Lewis and T. Rowe Price have lagged behind. As a whole the Consolidated Endowment has performed only slightly less well than the Standard & Poor's 500. For the last quarter, as well as the last 15 months, Davis, Palmer did better, T. Rowe Price worse, and Thorndike, Doran about the same as the averages. The economic views of the managers are currently quite similar: namely, (1) inflation in the area of 6% in 1977 and 1978, (2) minor increases in short-term (1%-2%) and long-term (0% to 1/2%) interest rates by year-end, (3) real GNP growth of 4.5% to 5.0% this year, (4) increased capital spending, (5) corporate profits up 10-15% in 1977, and (6) some improvement, albeit not dramatic, in the stock market by the end of the year. Concern focused on the international economy rather than the domestic. The relatively poor record of T. Rowe Price has resulted from the drastic decline in price-earnings multiples for growth stocks and the substantial liquidation of these previous "core holdings" by major investment institutions. T. Rowe Price remains firmly committed to growth stocks, however, particularly small companies which are able to finance growth internally. While they do not characterize growth stocks as currently undervalued, they feel growth stock multiples, now only about 20% above those of s&P average stocks, to be well justified by anticipated higher earnings and dividends.