Stipp: In your last report to investors at the end of year, you mentioned that you were seeing opportunities among growth-oriented businesses. And I think this sounds like an interesting opportunity because when you can get a growth-oriented business and get a good price for it, for example, you know that seems like a win-win situation. Why do you think that growth is looking attractive right now? What factors have fed into that?
John Calamos Sr.: Well, there are a couple of factors. First of all, if we go back in history, as the economy goes into recession and starts coming out of the recession, and I think we'd all agree now that it looks like we're coming out of the recession. What typically happens as you come out of the recession? Value does very well, and growth doesn't do well coming out of the recession. But after a period, whatever that period is, then growth really takes off. And when growth outperforms value stocks it doesn't do it by 100, 200 basis points or 1% or 2%, it does it by a lot.
So, if we go back in history, every recession coming out, value seemed to do well, and this is very similar ... Remember growth stocks, when you look in the valuation of growth stocks, you can look at the valuation today, but what you really want to look out is one year forward, two years forward, and three years forward.
Well the market today can't look beyond its nose. They're looking at this earnings, that's all. Now we'll be looking at the second quarter earnings in June. It's not going to look one or two [years ahead]. As the market gets more comfortable in looking further, they tend to look at growth, and they tend to value it. When we see that, then we start to get the P/E expansion and that is very significant for capital gains.
Right now, a value investor says, "I want a dividend." I don't know if I want a 3% or 4% dividend. I think I want 10% or 20% capital gain. That's going to make up for a lot of dividends going forward and that's the situation we're in.
Today, Jason, growth stocks are the most undervalued to value that we've seen in over 20 years, and we've come off a pretty good couple of years here. And valuation-wise, they're still very undervalued. So you're really buying, you're buying growth stocks at value prices, and the growth stock, especially the large cap growth today, very strong balance sheets, not a high leverage, global footprint.
So we're pretty excited about growth companies not only here in the U.S. but in our International Fund, in our Evolving World Fund. We think this next phase of the markets that growth will do very well.
Stipp: John, thanks so much for joining me today and for your insights. It was a pleasure speaking with you.
Calamos: My pleasure. Thank you, Jason.
Stipp: For Morningstar I am Jason Stipp. Thanks for watching.