Any discussion of the financial markets during this past quarter cannot ignore the geopolitical debate that has raged on over the past few months. We understand that there are well-intentioned, respectable people on both sides of the war and peace issue. Despite the differences of opinions, virtually everyone concerned probably agrees that the current situation may very well be a defining moment in the history of United States and will likely affect both the nation's and the world's future in profound ways. Our intention here is not to take sides in the important political debate, but to discuss the war's potential geopolitical impact and our views on how it may affect the financial markets in the coming months and years.
The financial markets look for certainty in an uncertain world, usually focusing on daily economic and corporate news. While the analysis of earnings and corporate events is a difficult task in and of itself, adding another layer of uncertainty from the current geopolitical events has surely taken its toll on the stock market. Market observers and pundits may analyze and study the stock market's technical trends and other data regarding its direction, but the truth of the matter is that there remains a strong emotional element that gets reflected in overall stock prices. This "combined wisdom" of the marketplace mirrors both the hopes and fears of investors and gets presented to us in the form of rising or falling stock indexes. Recently, hope and fear have been trading places as the key market driver on daily, even hourly basis, but we are focused on which sentiment can dominate in the long run.
At Calamos, we're strong believers in market-based economies as the world's best hope of increasing standards of living around the globe. The foundation of a market-based economy is the interaction between companies seeking profits and investors providing capital. This dynamic, along with a transparent government providing the important function of the rule of law, provides the best means for a society to efficiently allocate its resources and its capital. It has been the driving force of our prosperity and the increase in our standard of living for generations.
With that said, the current debate's effect on the markets seems to center on some key issues. As the Prime Minister of Turkey recently opined in the WSJ, "We wish them (the Iraqi people) freedom, democracy, human rights, and a prosperous future." While such a wish is of course attractive on a humanitarian level, the financial markets would respond very well to this world of greater stability, too. That's because, put simply, financial markets crave at least enough certainty to make rational projections into the future. What the current terrorist environment is providing, however, is a very uncertain future causing even more volatility in the marketplace. Therefore, we feel that the financial markets are aligned with the goals that seek a world of nations providing freedom, democracies, human rights, and a prosperous future to its citizens.
We at Calamos Investments are looking forward to a time when we can focus on economic issues and corporate business plans instead of the news of war. Our research continues to focus on valuations and the control of volatility in this uncertain world. Our long term view remains constructive, as we feel that more "freedom, democracy, human rights, and a prosperous future" will be the reward as a result of this short-term uncertainty. For those of us with such a view, we find this an especially attractive time to take advantage of opportunities. We have said often that the "flip side of volatility is opportunity." As we focus on the larger goals of a safer world, we are in position to take advantage of that opportunity in today's market.