Jim Slater, The Capitalist

October 16, 2009 | scorpion

The name Jim Slater is well known in the United Kingdom and among the industry gurus in the United States. While the average person may not recognize his name right off the bat, they are probably familiar with the price earning to growth earnings ratio, a concept this gentleman from England developed. Slater’s strategies, like Philip A. Fisher’s in the United States, were the first to be popularized among investors in the United Kingdom.

Biography

Born in 1929 in the United Kingdom, Jim Slater started his professional career as a charted accountant. He worked in this field until 1953 when he shifted his career into corporate management, working for the next ten years with three major manufacturing firms in the country. The last company he worked for before founding his own investment firm was Leyland Motor Corporation.

Slater Walker Securities was launched in 1964 with Peter Walker and the company became known for their aggressive corporate takeovers. Slater and Walker built the company up over the next five years into a major financial and industrial conglomerate before turning it into an investment banking firm in 1969. The company thrived until the recession in 1974 when it collapsed, leaving Slater bankrupt. Instead of giving in, Slater began to invest privately and made his way back to solvency.

He turned to financial writing after getting back on his feet and he was known as ‘The Capitalist’ for the investment column he penned for The Sunday Telegraph in London. His column became one of the most widely read in the country among industry professionals. He also wrote for an investment advisory service called ‘Company REFS’, providing investors with information on all publicly traded firms in the United Kingdom. His advice in both writing venues confirmed him as well-respected investment guru.

Considered today as one of the United Kingdom’s most successful professional investors, Slater remains active as an investor in small, growth-oriented companies. He also works as an investment educator and has taken on a second career as author of children’s books.

Claim to Fame

Slater’s work at The Sunday Telegraph launched his career as an investment advisor. He used his column there to enlighten industry professionals on his particular methodology for stock investment and his strategies were the first to be offered to the public in the United Kingdom.

Why was he successful?

Slater, after his bankruptcy, began to private invest in small growth companies that were overlooked and undervalued in the mainstream market. He worked towards finding these small growth stocks before they became popular. He used his price earnings to growth ratio formula to find these stocks, a formula which combined growth indicators and value investing. The more he worked with the PEG formula, the more he realized that a particular stock was not expensive as long as the stock’s earnings growth remained high. He went on to expound on his PEG principle in his book ‘The Zulu Principle’ which outlines his investment strategies.

His inventions

The price earnings to earnings growth ratio – PEG – was developed by Slater. It is a formula that compares a company’s price earnings with the estimated or expected earnings per share growth rate. The PEG principle became known and used in the United States after 1992.

Publications

Jim Slater is the author of the following investment books:

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