10 Questions With Calamos Growth Fund Manager John Calamos

Have you sold off any positions recently?

We have sold off Cendant (CD Quote), sold off some Nike (NKE Quote). We were heavy in the restaurant area -- we sold off Darden Restaurants (DRI Quote).

It's a pretty fluid portfolio, though. We may come back into them at some point.

2. Your turnover rate back in 2000 was about 200%; currently, it stands at about 91%. Any reason for the less-frequent activity? Are there more stocks to hold on to at this point?

A lot of that is market-related. We don't have specific target turnover rates. We do have some core holdings that we tend to hold for a long term, but it's more a component of the market action over the past year compared with the market back then.

Having said that, in this down phase of the market, there are probably fewer ranking changes among our investments.

Even with the fund's high turnover, we've been very tax-efficient.

John Calamos Chairman, CEO, CIO Calamos Asset Management

Fund: Calamos Growth, Co-Managed since Sept. 1990 inception.

Assets: $1.91 billion

Expense Ratio: 1.5%

One-Year Performance: Down 6.05%, Top 10% of Mid-Cap Category

Three-Year Average Annual Performance: 12.15%, Top 1%

Five-Year Average Annual Performance: 16.88%, Top 1%

Top Three Holdings: Apollo Group, International Game Technology and Weight Watchers.

http://www.calamos.com

Source: Morningstar, Calamos

3. Earlier this month, you said you see many encouraging signs in the economy. Where do you see the economy and this market heading?

GDP came out at 3% [Thursday] morning -- not bad -- but you'd never know that looking at third-quarter market performance, the worst stock market in years. It does seem to us that the underlying economic situation is improving. Quite frankly, the market price action looks very much like what I experienced in the 1970s, a horrible market environment, just unrelenting on the downside at time.

The difference is that in the 1970s, economically, we were a mess. We lost control of our money -- inflation doubled and doubled again -- the bond market went into a nose dive, the Watergate scandal, we went off the gold standard. Economically, we're in much better shape today.

Our view is that this correction, economically, is a cyclical one, not a secular correction. What we see on the price action is a correction on the valuation aberration of 1998 and 1999. In fact, even with the market correction we've had, valuations on large-caps are still pretty stretched.

Many of the mid-cap stocks are pretty compelling, especially compared to the large-cap stocks. We think large-cap stocks will go sideways at best, ending up in a trading range. The more compelling valuations will be in the mid-cap sphere.