John P Calamos: the richest investor you’ve never heard of
By
Piper Terrett Feb 17, 2012
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John P Calamos is heading our way. The billionaire US investor, who manages assets of around $32bn, is setting up shop in London, where he is opening new offices for his firm, Calamos Investments.
While he may not be a household name yet in the UK, Calamos is worth watching. The author of two books on investing, he ranked 258th on the Forbes Rich List in 2006. Not bad for the son of a Greek immigrant who, according to Forbes, swept floors at his parents’ grocery store in Chicago.
Now in his seventies, Calamos first became intrigued by the stock market in his teens. “I had always been interested in the markets from when I was a kid of maybe 16 or 17,” he told Investment Week. “I found a box with some old stock certificates in the basement of our grocery store and I investigated all of them and they were all worthless.”
Undeterred, he came up with a portfolio of five stocks and talked his mother into letting him invest his parents’ savings in them. “My father was a Greek immigrant, we lived above the grocery store, so they thought savings were a silver dollar in the cigar box,” he recalls. “My mother had a lot of faith in me to allow me to actually buy the stocks.”
The portfolio included Texas Instruments, Beckman Instruments, Seiko Chemical, Brunswick and Muns TV. Muns TV failed. However, Texas Instruments performed well and split several times over, enabling his parents eventually to retire on the proceeds.
After earning an MBA and joining the US Air Force, where he flew B52 bombers during the Vietnam War, he founded Calamos Asset Management in 1977, pioneering the use of convertible bonds in risk management. The company went public in 2004.
Having cut his investment teeth in the ‘70s, Calamos sees lessons learned then as still applicable now. “One of the things we learned in the 1970s and people are learning today is you have to remember the flipside of volatility is opportunity,” he told Investment Week. “This is a struggling market, but there is opportunity if you can see through the volatility and take a longer view.”
So what are his investment predictions for this year? Despite acknowledging in his January review for Calamos Investments that equity markets will reflect “confusion and skittishness” in 2012 as economies go through “debt deleveraging cycles”, it is clear that Calamos holds some bullish views.
Despite other investors’ fears of a possible hard landing in China, he expects a “strong rally in Chinese equities in 2012 and in emerging markets overall”. While he admits large increases in price / earnings ratios are unlikely in markets in the developed world, he feels that emerging markets may yet “provide an area of opportunity, although they are still reliant on developed economies to fuel their growth”.
Calamos also believes that shifts in world politics this year could have a wide-ranging effect on investments. “2012 is a pivotal year in regard to global politics and there could be significant impacts on the global markets,” he writes.
“The US, China, Europe and many countries in the developing world are undergoing leadership changes, which create opportunity and risks.” He also thinks that the US housing market is stabilising and “perhaps even showing signs of a little life”.
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