BiographyJim 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 1964. 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. He devised Company REFS, a monthly company statistical guide, and recently took advantage of the commodities boom by co-founding Galahad Gold which over four years made profits averaging 66% per annum from gold, molybdenum and uranium investments.
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.
Books by Jim Slater
Develop a method that suits you.
Carefully select a method of investment and then, based on personal experience and the performance of your portfolio, hone, temper and refine it until you are satisfied beyond doubt that it works for you. As you become more expert you can use several different methods at the same time according to market conditions
Establish a margin of safety.
Any method, whether it be growth or value, should be based on establishing a margin of safety - a cushion between the amount you pay for a company's shares and the amount you believe they are worth. The attraction of building a margin of safety is that it helps to protect against downside risk and at the same time provides the scope for an upwards re-rating.
Adjust the margin of safety to your approach.
For growth stocks, a typical method embracing a margin of safety would be to seek out shares with strong earnings growth records and a relatively low price-earnings ratio in relation to their future growth rates. Ideally the growth rate should be at least one third more than the price-earnings ratio. To increase the safety factor, it is also highly desirable for the company to have a record of strong cash flow in relation to earnings per share and a strong balance sheet.
For value stocks, the margin of safety can be established by a low price-to-sales ratio, low price-to-book value and strong cash flow. Also with many undervalued asset situations it pays to look for recent relative strength and recent directors' buying which can be signals that a company is about to turn around.Taken from The Global-Investor Book of Investing Rules