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Zulu Investing is a GARP investing style which uses a combination of growth and value, looking for shares where brokers are forecasting high earnings growth, but which are currently valued at a price that is low relative to their forecast earnings. He believes growth shares to be the most rewarding investments, with unlimited upside if the right companies are picked. In he published his book articulating the strategies and investment criteria that underpinned its success.
- The Zulu Principle: Making Extraordinary Profits from Ordinary Shares
- Jim Slater's Zulu Principle: Growth Investing mixed with Value
- Investment Books
By Jim Slater.
The Zulu Principle: Making Extraordinary Profits from Ordinary Shares
By Jim Slater. All rights reserved; no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior written permission of the Publisher. This book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published without the prior written consent of the Publisher. No responsibility for loss occasioned to any person or corporate body acting or refraining to act as a result of reading material in this book can be accepted by the Publisher, by the Author, or by the employer of the Author.
Many of the lessons learned, when working together on Company REFS as a team effort are incorporated in the text. I would also like to thank my son, Mark, for editing this book and making many helpful suggestions. Particular thanks are due to Tom Stevenson, City Editor of the Independent , for editing the final version and making many constructive suggestions for improving both the text and structure of most of the chapters.
As always, I must congratulate Edward McLachlan, who has drawn the superb cartoons. For reasons that will become apparent, my favourite is the one in chapter I would also like to thank my wife for understanding that writing takes up a lot of time that might otherwise be spent with her. I would feel unsafe if I did not thank my secretary, Pam Hall, who is now a veteran of all of my investments books.
Most of the chapters have to be typed many times before we reach a final draft. As always, Pam has been a tower of strength. Last, but not least, thanks are due to Lesley Baxter for line-editing the final version with me. She always makes an invaluable contribution. Since writing the hardback version of Beyond the Zulu Principle there have been a number of important developments.
First and foremost, I am now in possession of powerful additional evidence showing the effectiveness of the investment criteria outlined in this book. The details are set out in the Appendix.
I think you will find them very convincing. Since the publication of the hardback in , I have held two investment classes for beginners; one on 28 September and the other on 17 November This enables subscribers with a computer to obtain all the details of REFS in the Companies Volume and make their own tailor-made searches for interesting shares. Special terms are available for subscribers who want to take both the written and electronic version.
I am thinking of writing a regular monthly newsletter. If I do, it would incorporate the following features:. A strongly argued recommendation when opportunities could be identified in each of the three main categories: one from the top companies, one from the SmallCap index and one from the Fledgling index or from AIM. A carefully tailored search each month of the vast Hemmington Scott database. The introduction of CD REFS gives me great flexibility to make demanding searches using my own highly selective criteria.
Each month I would conduct a search of this nature, explain the criteria I adopted, and review the findings in detail. Points of interest. These would include book reviews, guest contributions from investors of note and thought-provoking items I have noticed in the world press. Monthly updates. Monthly reviews of companies affected by key active investment measures. I would only feature letters when they asked questions that would be of real interest to all readers.
If you are interested and want to know if I have proceeded with the idea of a newsletter, I suggest that you contact Hemmington Scott. I have recently started an Internet site which explains my investment approach, offers current recommended reading, gives details of REFS and my masterclasses and provides the answers to most frequently asked questions. If you are interested I suggest that you pay the site a visit. The website address is www. I hope you enjoy this book and that it will help to refine and improve your investment approach.
T h e Zulu Principle and this sequel explain how important it is to focus when investing. It is no good trying to become master of the universe. It is better to specialise in a narrow area and be relatively expert in it. I have always focused on small-cap and micro-cap stocks.
The reasons are obvious — first, they are under-researched so better bargains are available and second, on average they perform very much better than large-cap stocks. In fact, over the last fifty years micro-cap stocks have outperformed the market by more than eight times. In this book I outline the methods I was using for investing in Since then I have refined my approach a little but it is fundamentally the same.
First, I look for a tailwind. By this I mean concentrating on an area or sector which has a very favourable outlook. If you are in the wrong type of business at the wrong time you are bound to lose money. If you are in the right business at the right time it is very difficult not to make a lot of money.
One way of ensuring that you are in a business with a favourable outlook is to make sure that the relative strength of the sector and the stock you fancy in it is very positive in the previous year compared with the market as a whole.
This is something I always check in an effort to make sure that all is well and that insiders are not aware of some horrible news which is not yet in the public domain. As part of my Zulu Principle focus I concentrate on growth shares.
I also look for shares which are a relative bargain at the time of purchase. This is determined by comparing the prospective price-earnings ratio with the forecast growth rate. Ideally you want to ensure that the prospective price-earnings ratio is well below the growth rate. Now PEGs are commonplace and used as an investment measure by most financial institutions. It is vitally important that the company should have a reasonable record of growth. Anything less than this would not give enough of a basis to determine that the growth is real growth as opposed to recovery from a setback.
Another very important criterion is to make sure that cash flow is in excess of earnings per share. Too many companies seem to be doing well until you analyse their accounts and find that their earnings per share are not backed by cash. They are phantom profits. By ensuring that cash flow is regularly in excess of earnings per share you can avoid the Enrons of this world. Another vital criterion is to ensure that the directors are not selling their shares. Sales by more than one director would be enough to put me off completely, however impressive the statistics appeared to be.
Conversely, it would be very bullish if several directors were buying. Particular note should be taken of buying by the chief executive and the financial director. They ought to know exactly what is happening within the business and it is always encouraging to see them putting their money where their mouth is. To summarise, it is essential to have a firm idea of what constitutes an ideal growth share.
These are the characteristics that have served me well:. As we go to press the outlook is uncertain. However, be of good heart — armed with this method and helped by Company REFS, you should be able to beat the market by a very considerable margin.
Good investment is often a case of turning conventional wisdom on its head, so let me say at the outset who this book is not for. If you have a pension and some life insurance, and maybe a unit trust or two, and if you are happy with the steady, relatively secure growth they provide, this book will probably not interest you. You will be reassured by the low risk of your pooled investments, and the fact that their performance is broadly in line with the stock market as a whole.
If , however, you want more than the average returns offered by passive investments such as unit and investment trusts; if you are prepared to set aside a few hours a week to achieve those extra -ordinary returns; and if you believe, as I do, that you will enjoy doing so, then this book is for you.
I have devoted a substantial amount of my time in recent years to fine-tuning my thoughts on investment and I am very excited about the conclusions I have now reached.
I have also enjoyed very good financial returns putting my investment theories into practice; I hope that after reading this book you will too. But I really believe that you will find a tested approach to investment that will give you a good chance of beating professional investors and the market by a substantial margin, year in year out.
You will also derive a great deal of enjoyment and satisfaction along the way. They devote their working lives to investments; they ought to be experts. Bear in mind, however, that investment managers are different from the qualified practitioners at the top of many other professions.
Unlike doctors, barristers, architects and accountants, they do not have to study for five or more years, read hundreds of books on their subject and pass a series of difficult examinations. In investment management, it is possible to get by with very little theoretical knowledge and no formal qualifications of any kind.
The competition is therefore not so daunting to the private investor as might appear at first sight. All investors start at a disadvantage when trying to outperform the market.
Unlike the indices, all investors have to pay dealing costs and investors in institutional funds have to pay initial and annual management charges. Even when the playing field is level, the institutions are weak opponents and, as it happens, there are several areas where the small private investor actually has an advantage.
Though there are as many good businesses as ever, it is useless for us to make purchases that are inconsequential in relation to [our] capital. Given that minimum [our] investment universe has shrunk dramatically. This is a considerable advantage — with less money to deploy, they can invest meaningfully in smaller companies. As you will see later, expertise is needed and there are greater risks.
So, the first advantage of private investors is one of size. The second is one of spread. Not many institutions have to invest as much as Warren Buffett, but in the UK there are several unit and investment trusts with billions under management.
Private investors know that, even with a portfolio of ten shares, their first choice is better than their tenth. Obviously, their tenth selection is. Open navigation menu. Close suggestions Search Search.
Jim Slater's Zulu Principle: Growth Investing mixed with Value
Accueil Contact. Theoretical basis of the Schroth method. Division of the trunk including shoulders and neck into three segments -- II. Symmetrical postural deviation in the sagittal plane -- III. Pastural deviation in the frontal plane -- IV.
Jim Slater trained as a Chartered Accountant but first became well-known for writing an investment column in The Sunday Telegraph under the nom-de-plume 'Capitalist' before starting Slater Walker in Since his high-profile days in the City, Jim has produced his autobiography and written many children's books and investment books including the best-selling The Zulu Principle. Jim is currently Deputy Chairman of Agrifirma Services Limited which advises Agrifirma Brazil, an agricultural company based in Brazil, in which he has a substantial investment. Jim continues to invest actively in the UK stockmarket with a particular interest in mining stocks. Acknowledgements Preface Preface to the Edition 1. Your Approach to Investment 2. Why Growth Shares 3.
The strategy combines growth, value, quality and momentum factors. Its most famous ratio is the price-earnings-growth factor PEG which compares a company's forecast price-to-earnings ratio with its forecast earnings-per-share growth rate. It also looks for a high return on capital employed and positive relative price strength in small and mid-cap shares. Jim Slater wrote: "Most leading brokers cannot spare the time and money to research smaller stocks. You are therefore more likely to find a bargain in this relatively under-exploited area of the stock market. Jim Slater is one of the UK's most popular home-grown investors and his strategy is well followed.
Jim Slater's classic text made available once more Jim Slater makes available to the investor - whether the owner of only a few shares or an experienced investment manager with a large portfolio - the secrets of his success. Central to his strategy is The Zulu Principle, the benefits of homing in on a relatively narrow area. Deftly blending anecdote and analysis, Jim Slater gives valuable selective criteria for buying dynamic growth shares, turnarounds, cyclicals, shells and leading shares. He also covers many other vitally relevant aspects of investment such as creative accounting, portfolio management, overseas markets and the investor's relationship with his or her broker. From The Zulu Principle you will learn exactly when to buy shares and, even more important, when to sell - in essence, how to to make 'extraordinary profits from ordinary shares'.
Twenty years on, he has refined, honed and distilled his investment thoughts into a book that is vintage Slater: innovative, imaginative, original and fresh with sophisticated investment methods made to seem simple and glaringly obvious - if only you'd thought of them before. Somehow or other he was involved in virtually every major deal. He rode the waves with unprecedented skill, imagination and charisma. No wonder this book is an essential building block for understanding investment.
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Нам нужна точная цифра, - напомнила Сьюзан. - Оценки ущерба всюду приводятся разные. - Она еще раз взглянула на текст. - Элементы, ответственные… У Дэвида Беккера, находившегося в трех тысячах миль от комнаты оперативного управления, загорелись. - Элементы! - воскликнул .
Что я здесь делаю? - пробормотал. Ответ был очень простым: есть люди, которым не принято отвечать. - Мистер Беккер, - возвестил громкоговоритель. - Мы прибываем через полчаса. Беккер мрачно кивнул невидимому голосу. Замечательно.
Медленно, словно после укола транквилизатора, он поднял голову и начал внимательно рассматривать пассажиров. Все до единого - панки. И все внимательно смотрели на. У всех сегодня красно-бело-синие прически. Беккер потянулся и дернул шнурок вызова водителя. Пора было отсюда вылезать. Дернул .
- Наркотики внутривенно. Кто бы мог подумать. - Проваливай! - крикнула. - Вон.