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Beyond The Zulu Principle: Extraordinary Profits from Growth Shares

Book Description

The goal of all investors is to make the maximum possible profit from their investments. 'Beyond The Zulu Principle' shows you how to do this by focusing on growth shares. Jim Slater believes he has discovered a major market anomaly that should enable both private and institutional investors to enjoy exceptional returns in the stockmarket. A number of important factors are crucial to successful investment. Jim Slater explains how to choose a company operating in the right sector with an advantage over its competitors. He also highlights the importance of directors' dealings, CEO changes, relative strength, cash flow accelerating earnings, and the capacity of some companies to clone their activities. Simple but enormously effective, the guidance offered here should help readers to make stockmarket profits well beyond the market averages.

Table of Contents

  1. Cover
  2. Publishing details
  3. Acknowledgements
  4. Preface to the 1996 Edition
  5. Preface to the 2010 Edition
  6. 1. Your Approach to Investment
    1. Aim to beat the institutions
    2. Investment clubs
    3. The Zulu Principle
    4. Reading about investment
    5. Company REFS
    6. Summary
  7. 2. Why Growth Shares?
    1. The main approaches to investment
    2. A remarkable investor
    3. Some UK examples
    4. The case for growth shares
    5. The market as a whole
    6. Selection is more important than timing
    7. Summary
  8. 3. What is a Growth Share?
    1. The Right Sectors
    2. Competitive advantage
    3. Management
    4. Earnings per share growth
    5. Company REFS’ definition
    6. Summary
  9. 4. Price-Earnings Growth Factors
    1. Compare chalk with chalk
    2. Rolling twelve months ahead
    3. Checking the validity of forecasts
    4. Brokers’ consensus forecasts
    5. Summary
  10. 5. PEGs at Work
    1. PEG tests
    2. Avoid shares on very high PERS
    3. Summary
  11. 6. Cash Flow
    1. Advantages of strong cash flow
    2. Constructing a cash flow sieve
    3. Capital expenditure
    4. Summary
  12. 7. Relative Strength
    1. The third sieve
    2. Further proof
    3. More on relative strength
    4. Technical analysis
    5. Summary
  13. 8. Management
    1. Ways of checking management
    2. Chief executive officer changes
    3. Directors’ share dealings
    4. Summary
  14. 9. Competitive Advantage
    1. The right sector
    2. The key statistics
    3. Return on capital employed
    4. Exclusion of intangibles
    5. Return On Investment
    6. Operating margin
    7. Summary
  15. 10. Strong Financial Position
    1. The gearing ratio
    2. Four investment tools
    3. Summary
  16. 11. Accelerating Earnings Per Share
    1. Brokers’ consensus forecast changes
    2. Cloning
    3. Summary
  17. 12. Other Investment Criteria
    1. Small market capitalisation
    2. AIM
    3. Fledgling index
    4. FT-SE SmallCap index
    5. The Mid-250 index
    6. FT-SE 100 index
    7. Non-index
    8. Attractive dividend yields
    9. A company buying in its own shares
    10. Something new
    11. Price-to-sales ratio
    12. Summary
  18. 13. Your Stockbroker and You
  19. 14. Putting it All Together
    1. A. Mandatory
    2. B. Highly desirable
    3. C. Bonus factors
    4. Using the quiver full of arrows
    5. Summary
  20. 15. Portfolio Management
    1. How many shares?
    2. Has the story changed?
    3. Relative strength
    4. Stop loss
    5. PEPs
    6. Files
    7. Summary
  21. 16. Bull and Bear Markets
    1. Signs of a bear market
    2. Characteristics of bull and bear markets
    3. Summary
  22. 17. Technology Stocks
    1. Internet
    2. Five main classifications
    3. Different approaches to valuation
    4. Profit margins
    5. Essential reading
    6. Summary
  23. 18. Cyclical Stocks
    1. More guidelines for buying cyclicals
    2. Summary
  24. 19. Recommended Reading
    1. Books on investment
  25. 20. Summary
  26. Appendix
  27. Credits