The Zulu Principle was authored by Jim Slater.
Jim Slater (1929-2015) was one of the U.Ks foremost investment experts.
He possessed an uncanny ability of identifying undervalued companies.
He was the guy who popularised the concept of the PEG Ratio and as a fully trained accountant he had the ability to see at a glance what was on a company's finacial statements.
The Zulu Principle was published in 1992 by which time Jim Slater had many years of investing under his belt and was also a very well respected investor.
In his book he offers three recommendations to the reader.
The book itself lists his 11 criteria that he has set out for success and each chapter ends with a detailed summary.
The Zulu Principle kicks off in Chapter 1 with Jim Slater offering three basic pieces of investment advice:
1. You need to make a promise to yourself to devote at least three hours per week on your investments
2. Read The Zulu Principle in its entirity (at least once) and then decide which type of investmet approach you think would suit your temperament
3. When you have selected 2. above, become an expert in that choice.
In his early days, Jim Slater had a column in the Sunday Telegraph under a pseudonym of "Capitalist"
In his first article he describe his 9 criteria he uses for finding his successful companies.
After two years he realised that his approach was working, and working well. Apreciating 68.9% in just two years, compared with a meagre 3.6% in the market average.
Some 27 years later, he revised his original 9 criteria to 11criteria. It is these 11 criteria that Slater concentrates on in his book.
They are listed here for your information but expanded upon within the book:
1. A Positive Growth Rate in Earning Per Share in at Least Four of the Last Five Years
2. A Low Price Earnings Ratio Relative to The Growth Rate
3. The Chairman's Statement Must Be Optimistic
4. Strong Liquidity, Low Borrowings and High Cash Flow
5. Competitive Advantage
6. Something New
7. A Small Market Capitalisation
8. High Relative Strength of the shares Compared With The Market
9. A Dividend Yield
10. A Reasonable Asset Position
11. Management Should Have a Significant Shareholding
You can get the full scoop inside the book. Over 200 pages of practical help and guidance with finding companies that make excellent investments.
Slater gives an example of a company that he found that ticked all of the above boxes. The company he analysed was capitalised at £26.3 Million. One year later, that company gained 97% with the market improving a paltry 5%.
Excellent example. And that was only Chapter 2 out of a total of 20.
A must read book.
The Zulu Principle by Jim Slater
The Zulu Principle is central to Jim Slater's strategy.
Jim gives the secrets to his identifying of growth shares in smaller companies. But not just growth shares, he elaborates on cyclical shares as well as shell and leading shares.
also goes into creative accounting, portfolio management and other
types of share. But the big idea is Jim's strategy - the PEG Ratio.
From this book you will learn exactly when to buy shares using his method (PEG) and just as importantly, when to sell them. Or to paraphrase the tagline to his book: "Making Extraordinary Profits From Ordinary Shares."
You can grab a copy of Jim Slater's Zulu Principle - right below. Just click o the link:
Writing this review for The Zulu Principle spurred us on to read the whole book again - cover to cover.
Second time around it was even better.
Jim Slater must have had a logical mind. His accountancy background would certainly have stood him in good stead. He was similar to Warren Buffett in a lot of ways but yet different.
Buffett's strategy is to go for mainly Value shares and never sell. Slater's strategy was to go for smaller, growth type shares and sell them when they reached their target.
A big difference in approach.
Chris and Clem Meet Up - hopefully, the last time before lockdown easing
Chris and Clem Meet Up - at last! They can meet in the beer garden
Chris and Clem Meet Up and it is Chris' turn to do most of the talking. Chris' little windfall has allowed him to widen his portfolio. Chris vows of more.