Inside Active · Oct 7, 2026 · 34m · 21m saved
With Brandon Nelson, Senior Vice President and Portfolio Manager at Calamos Investments
Brandon Nelson's team has tracked the stocks it sells for years, and he said they keep losing to his benchmark six and 12 months after they leave the portfolio.
Most investors, he said, do the opposite of what that data rewards: they sell their winners too soon and hold their losers in the hope of getting back to even.
"And sure enough, stocks we sell out of our portfolio persist as losers in the six months after we sell it, 12 months after we sell it, and not just by a little bit."
Brandon Nelson, Senior Vice President and Portfolio Manager at Calamos Investments, on Inside Active, runs the Calamos Timpani Small Cap Growth Fund and the Calamos Timpani Active SMID Growth strategy, which the host said had just converted from a mutual fund to an ETF. He said he has run the same process for 30 years and keeps substantial personal money in the funds.
The full interview is covered here so you can skip it. 34 minutes of audio, 13 minutes of reading.
Here are the 13 lessons that matter.
Key Takeaways
Fast growth plus growth the market underestimates is the whole philosophy, and the second half is harder to find
He would pass on a company growing 37% if the market expects 40%
He would rather own one expected to grow 18% that delivers 25%
Valuation is never a reason to buy or sell on its own
New positions start at 50 basis points and can grow past 2% within six months
Stocks the team sells keep underperforming its benchmark six and 12 months later
Small caps have lagged large caps for nine years in a row, but their earnings growth is forecast to accelerate in 2027
The shortage of IPOs barely matters to his idea pipeline, which he called "a rounding error"
1. Fast Growth Plus Surprise
The host asked what Nelson's "fundamental momentum" philosophy means. He said it has two parts: growth that can last for many quarters, and management teams that manage expectations well enough that the market keeps underestimating them.
Fundamental momentum is fast growth plus growth the market has not priced
"So fast growth and underestimated growth equals fundamental momentum." — Brandon Nelson
The second half is the harder one to find
"I think of the two underestimated growth is more difficult to find." — Brandon Nelson
Fast-growing companies are easier to spot, he said. Executing on that growth is a different matter, and that is where his team's meetings with management come in. The market pays a premium for the combination. His example was a stock re-rated from about 14 times earnings when the process starts to about 35 times seven to nine quarters later, which he said is where the big winners come from.
A great company is not always a great stock
Nelson agreed with the host's point. A slow-growing company that does not beat expectations can still be well run.
"And if you don't have it, you still might be a great company, but you're just not great for our portfolios." — Brandon Nelson
