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Beyond The Zulu Principle: Extraordinary Profits from Growth Shares by Jim Slater

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16. Bull and Bear Markets

Investors who buy shares for the long term and insist on a margin of safety (such as a low PEG) at the time of purchase, have little to fear from the vagaries of the market. When the bear is rampant, share prices will be savaged, but as long as the companies in question continue to grow, and their EPS continue to increase, the market will eventually reflect the progress they have been making.

The first key point is to invest only ‘patient money’ that can be locked up and will not be needed suddenly. The second is to buy systematically with a margin of safety and to hold long term. Warren Buffett advises investors to pretend that they have been issued with a punch-card with a space for 20 holes. As they make each investment, ...

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