When he talks about mid-caps, money manager Sandy Lincoln likes to recall the time when his then eight-year-old and six-year-old daughters asked if they could baby-sit. "I said, well, at eight years old, you can't baby-sit," he recalls. However, the older daughter had heard him make practice presentations at home and replied, "But between me and my younger sister, we have 14 years of experience."
Lincoln uses that story to illustrate the point that sometimes the sum of the parts is just parts: An eight-year-old and a six-year-old don't add up to a 14-year-old. The chief investment officer of Wayne Hummer Asset Management in Chicago, a firm with $1.4 billion under management--40% percent of it in mid-cap separately managed accounts and mutual funds--says that's just the kind of thinking that investors use when they overlook the virtues of mid-cap stocks.