Fall 2007 — CIO interview with Chuck Royce Q307

Q. Do you agree with the idea that we haven’t really seen a correction in the stock market yet?

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A. Definitely. What we did see, especially in July and early August, was a great deal of volatility accompanied by anxious headlines about subprime mortgages, credit issues and leverage. However dramatic the localized, specific effects of these problems have been in their respective areas, they have not yet produced a substantial stock market correction, which we would define as a decline of 15% or more. The downdraft that began in July hit an interim bottom on August 15, and in the third quarter the Russell 2000 saw 24 out of 57 trading days in which it moved 2.0% or more intraday, making it a wildly volatile period, but not a seriously bearish one.