John Calamos Sr. Speaks at AHI Business
Network Event in Philadelphia
Washington, DC —John Calamos, Sr. was the featured speaker at the Philadelphia Four Seasons Hotel on Saturday April 19th, 2008 at a networking event sponsored by the American Hellenic Institute (AHI) Business Network.
The evening
began with Nicholas Chimicles, the Chairman of the event, offering his
welcoming remarks. Other members of the Host Committee included: George
Anni, President of Valanni Enterprises, Inc., Chris and Evdokia Blazakis,
Kathleen Chimicles, President GlenDevon Group, Inc., Tassoss Efstratiades,
Partner Obermayer, Rebbmann, Maxell & Hippel, LLP, Ted Golfinopoulos,
President TG & Associates, Paul Kotrotsios, Publisher & President
Hellenic News of America, Constantine Larigakis, Vice President Commerce
Bank, Paul Mattis, President The Mattis Group, Constantine Pippis and
Dr.Alexandra Budike, and Dr.George Tsetsekos, Dean LeBow Business College
Drexel University. Welcome remarks were offered by the Chairman of the
Host Committee, Dr.Constantine Papadakis, President, Drexel University.
In introducing John Calamos, Sr., Nicholas Chimicles cited John Calamos’ strong commitment to education, “Last May, John Calamos delivered a commencement speech at the Benedictine University. That speech is more instructive than a mere biography of John Calamos. It speaks of the humble background and surroundings that Mr. Calamos had as a child, coming from a family with no college education. He was very intent on getting an education and his family was very supportive, which is a distinguishing characteristic of immigrant families. He also spoke of risks one encounters in life, investments and all aspects of existence. John urged the graduates to be active participants—not mere spectators, but players,” said Chimicles.
The Ballroom at the Four Seasons attracted close to one hundred people, who came seeking investment advice. A lively questions and answer period followed where the guest speaker offered his respected opinions about a wide variety of topics including trends in technology and globalization in the marketplace.
In his speech John Calamos Sr. described his involvement with the business community. When he was out of College, he saw an ad for pilots and decided to join the air force. He spent five years in active duty, and ten years on the reserve. Before that he had received his master degree in Finance. When he first started investing, he found a box in his basement with old certificates of stocks and he decided to further investigate them. The stocks were worthless, but the research fueled his imagination. Later, he persuaded his mother to give him the family’s nest egg. He researched five stocks and invested the $5,000, which increased dramatically in value and became the basis for his parents’ retirement.
During this time Calamos also was very interested in convertible bonds. “Typically, people buy bonds when the market is bad and stocks when the market is good. However, convertible bonds have one distinguishing feature. Anytime the owner of the bond wants to, they can convert that bond for a specific number of shares into the underlying common stock. Therefore, there is the upside of the stock market but the downside safety of the bond,” said Calamos.
Calamos began his investment career in the 1970s. While the Dow Jones hit a high of 1,000, it had fallen to 500 by 1974, (a 50% correction). Interest rates were at 18%, his mortgage was at 10%, and earnings were very poor for companies. Calamos used convertible bonds extensively, and did very well for his clients. However, because many people did not know very much about convertible bonds, it was difficult to be a broker because his company wanted him to sell their products. Therefore, in 1977 he decided to set up his own broker dealer and continue investing in convertibles.
In 1980 Calamos decided he wanted to be an investment advisor instead of a money manager. He then wrote to three companies he had seen in an article to ask them if they were looking for new managers, and explained to them who his company was and what their unique expertise was. Delta became his first client in 1980, and is still a client today.
Calamos describes his company as a family business. His brother who had worked in factories and had been laid off was given a job by Calamos at the company when he had caught his bookkeeper stealing money. He sees family as the best and most trustworthy choice in a company. His brother continued to work for him until his retirement a few years ago. His nephew, Nick, joined the company just out of college and initiated the firm’s use of technology, a competitive strength for the firm. Today Nick is the Co-Chief Investment Officer Over the years, Calamos’ company has become one of the largest convertible managers in the world. The firm manages over 40 billion dollars in equities, convertibles and blended strategies.
Calamos shared a few observations: “It is possible to earn 12-15% annualized return over the long-term, which means you can double your money every 3 ½ years.” He also states that “...it is not about beating the indexes but creating wealth. Being in the market for the short-term does not work and one should not do this for serious money. One needs a long-term plan to execute and when setting up the long-term portfolio there must be a long-term trend. Today, people are looking for companies that are participating in long-term trends: Google, Apple, etc…”
Calamos also states that globalization is not a threat, but has been a huge force for building wealth. He says people do not appreciate how the global economy has benefited investors in the U.S. He suggests that globalization is a force that puts checks on governments “…if a government makes a mistake it will be punished by no more trading, money will move out of the country…” The phenomenon of globalization is one that he sees as one of the factors as to why the U.S. is also experiencing a weak dollar. This is because countries all over the world are allowing citizens to invest outside their own country. Globalization is also a significant trend that he believes will “propel the world to higher standards of living.”
Calamos concluded his remarks with a quick market overview. He stated that “the volatility will not subside in the market, however volatility does not necessarily have to be a negative thing because with volatility comes opportunity.” He cited that the most volatile sector of the market, technology, is also the most lucrative and it is where people find the most opportunity. His view is that maybe the worst is over as far as the economy goes. However, he believes that there are several actions imposed by the government that may be negative to the market. For example, he states that, “every time the Fed[eral Government] takes an action there is a long drop in the rates and that the Fed does not do a good job in manipulating the economy.” Outside the automotive and housing market, he sees the American economy is still strong. “Putting regulations causes more problems and the election is not helping because it feeds into fear. The market today is all about fear and when people have fear they will not do anything and will just tighten up,” he said.
He is optimistic regarding the market, but he still sees many problems going forward. On a brighter note, he ends his speech stating that he feels the work is over and that the market has been “behaving better.”
During the question-and-answer portion of the evening, he first addressed the increase in commodity prices. He states that typically “commodity prices are cyclical and that a reversal is coming.” He also states that there is a “linkage of the weak dollar to commodity prices and the demand side from emerging markets.”
Calamos also discussed his support of the free-market which requires a level-playing field. He believes greater regulation of hedge funds is required for this to occur. There are two things that could kill the economy according to Calamos: “Congress and the Fed.” What worries him is the politicians because of “their solution is to raise taxes,” even though he suggests if they, “lower capital gains tax the government will get a higher revenue.”
AHI Executive Director Nick Larigakis in his closing remarks, praised John Calamos Sr. for his accomplishments as a role model for the Greek American Community. He then mentioned a feature on the American Hellenic Institute’s website where those seeking jobs can place their resumés for potential employers to access. Conversely, employers can list job vacancies for potential employees interested in applying.
CALAMOS INVESTMENTS
Calamos Investments is a diversified investment firm offering equity, fixed-income, convertible and alternative investment strategies, among others. With roots dating back to 1977, the firm serves institutions and individuals via separately managed accounts and a family of open-end and closed-end funds, providing a risk-managed approach to capital appreciation and income-producing strategies.
The firm serves institutions and individuals via separately managed accounts and open-end and closed-end funds, offering a risk-managed approach to capital appreciation and income-producing strategies. The company has retained its character as a boutique investment firm – one that originally specialized in convertible investments – while diversifying into new investment portfolios, such as global equities. The company’s Class A shares trade on the NASDAQ Global Select Market.
