The basic approach Mr Slater now adopts in his share selection and which he recommends in the book is to

General — July 20, 2010 at 13:57

The basic approach Mr Slater now adopts in his share selection, and which he recommends in the book, is to buy shares that trade on a low p/e relative to their forecast growth but which have already started outperforming as the market wakes up to their attractions.It is a simple enough method, made even more so by the tables in Refs which list companies that meet these two crucial criteria. But Mr Slater’s extensive research over the past year or so suggests that it has also been highly effective (albeit only tested in a relatively buoyant market).Between April 1995 and April this year, shares with p/e ratios of less than three-quarters their forecast growth rate over the coming year (with low Price Earnings Growth factors, or PEGs, according to Mr Slater’s terminology) have outperformed the market by an impressive margin. Coming in three volumes every month, Refs provides more than 2,000 pages of comprehensive statistical information on companies from the biggest FT-SE 100 stocks down to AIM tiddlers.As well as a wealth of historic profit-and-loss and balance sheet information, each company’s full-page entry shows a full list of individual brokers’ forecasts, entries showing recent directors’ dealings, news flow over the previous year, key dates and a sophisticated chart superimposing and comparing earnings per share and share price performance.Refs’ biggest advantage over other statistical services, however, is the fact that all the investment information such as price/earnings ratios and growth rates are calculated on a rolling 12-months-ahead basis that uses a pro rata proportion of the next two years’ forecasts to get an accurate fix on the next year’s statistics.This is such a simple development that it is amazing no one else has done it already, but if you think about it, it is a minimum requirement for any sensible comparison of companies. Beyond The Zulu Principle, as its name suggests, takes the thinking in Mr Slater’s first book further and attempts to develop nothing less ambitious than a share-selection technique that will consistently pick high-performance growth shares, the Holy Grail of investing.Never one to miss a profitable opportunity, Mr Slater makes no bones about the fact that the book is also a tool to promote his proudest creation in recent years, a monthly statistical service called, with no lack of modesty, Really Essential Financial Statistics (Refs for short).It is not a bad description of a product which many investors are finding to be the definitive investment tool. A five-page draft communique for the Arab summit – which Mr Moussa would not reveal to us yesterday – calls for a “just and lasting peace” in the Middle East based on land for peace, the very formula Mr Netanyahu has already rejected. He then described it as not a coup but as an attempt to put pressure on Mr Yeltsin by having the troops on alert, and insisted that several generals, whom he named as involved, should resign.But yesterday Gen Lebedmade no mention of these allegations, saying that the affair – still under investigation by military prosecutors – had “no future in court”.The acting defence minister, General Mikhail Kolesniko, wrote to the Duma to deny reports that Gen Lebed’s intervention on Tuesday had interfered with command and control over the armed forces.General Viktor Barynkin, acting chief of general staff, told the Duma there had been no attempt to organise a coup.

It was a welcome antidote to the amateurish dilettantism that has characterised share-tipping over here.
Since then he has also written an investment primer, Investment Made Easy, and a more advanced book on buying yield stocks, Pep Up Your Wealth, based on the thinking of the US investor Michael O’Higgins, who for years has championed the cause of out-of-favour, high-yielding stocks which both in the US and here have tended to outperform the market by a sizeable margin.Anyone who has read these books will be interested in Mr Slater’s latest book, due to be published in the autumn. A notable exception to this rule in recent years has been Jim Slater, whose first book, The Zulu Principle, was at the time the only decent attempt to take a systematic look at what made for good investment. This represents a fairly rapid expansion for a company which in 1993 recorded profits of just pounds 233,000 on sales of pounds 7.1m.Although the proceeds of the placing will be pounds 8.5m, around pounds 6m will be paid to venture capital investors. A further pounds 450,000 will be swallowed up in flotation costs.The remaining pounds 2m will be used to fund the expansion of the business.Just over 38 per cent of the shares are being floated Dealing will start on Thursday.. One of the enduring mysteries about investment in this country is that there are so few books to read on the subject.

Go into any bookshop and you will be faced with hundreds of how-to guides on cookery, gardening, computing and any number of other hobbies. But for the serious investor, it is next to impossible to find a book not written by an American, for American readers and focused on Wall Street. In 1973, the then owner Dick Whittard sold the business to interests controlled by Mr Gyle Thompson. It is seeking franchise partners in the US and arrangements for stores in Thailand and Taiwan are also under discussion.”Whittard has got 4.9 per cent of the speciality coffee market and 14 per cent of the speciality tea market,” Mr Hobhouse said. Mr Hobhouse joined in 1988.As well as teas and coffee the company sells ceramics such as teapots and mugs as well as confectionery and coffee making equipment.Last year Whittards made profits of pounds 2m on sales of pounds 18m. “We believe we have only just started.”Whittard was founded in 1886 by Walter Whittard, selling teas and coffees to local businesses. Next month it will open a new shop near Victoria in London which will roast coffee on site.Later in the summer it will open a larger format in London’s Baker Street featuring an expresso bar,.Whittard has 19 stores in Japan operated under a licensing agreement.

He was managing director of Tie Rack when it was floated in 1987. “You could say that I have no mortgage on my house,” he quipped yesterday.The company plans to add 10-15 new shops a year for the next five years. Whittard’s shares have been priced at 148p, valuing the company at pounds 24.5m. The listing will raise pounds 8.5m, which will be used to repay the venture capital groups who supported a buyout in 1988, and to add more branches to its network of 79.
The biggest beneficiaries of the flotation are chairman David Gyle Thompson and managing director Will Hobhouse who will hold 58 per cent of the shares following the flotation.