Nonetheless, a stronger case can be made for active management on behalf of cautious investors in today's climate. First, they avoided the downdrafts that hit several large-cap stocks. It was tough to own diversified manufacturer Tyco International last year, when press reports questioned the company's accounting. But the core Wilson holding is up 20 percent so far this year, as Tyco plans an initial public offering of its undersea fiber-optics cable network, TyCom. Third, Wilson has what he calls his farm team.
Active managers can bring in energetic relievers.
Network Solutions, the company that registers ubiquitous dot-com Internet addresses, jumped 275 percent so far this year. Last week VeriSign said it would buy the company. Among other farm team members, American Tower, which operates broadcast and wireless communications towers, is up 80 percent this year amid investor optimism towards the wireless phenomenon. Broadband network developer Qwest Communications International, another team member, was up 21 percent this year amid speculation that it would be acquired. But they have heart.