Mark Slater interview - A masterclass in growth investing

Friday, Mar 11 2016 by
72
Mark Slater interview  A masterclass in growth investing

Mark Slater is one of the most successful and widely followed growth fund managers in the UK. Since setting up Slater Investments 22 years ago, he and his team have delivered an exceptionally strong performance record across their growth and income funds.


A great deal of that success is down to an unshakable focus on buying good quality growth shares at reasonable prices. But equally, it’s about really understanding the nature and likely longevity of that growth. That means recognising the traits of different growth stocks and dealing with the psychological battles of buying, holding and selling these types of companies.

Back in 1992, Mark worked with his father, the late Jim Slater, on writing and publishing The Zulu Principle. It became, and remains, one of the most influential UK-focused investment guides around. The strategy rules in the book have a common sense, yet distinctly buccaneering feel to them. Arguably, that’s precisely what’s needed in the search for the great growth stocks of tomorrow. And it’s the reason why Mark still applies them today. With that in mind, I went to meet him to discuss his approach and some of the lessons learnt from his career in investing.

A word of warning: the interview covered a lot of ground, and while we’ve pared it back to the key parts, it’s still extensive! To help, we’ve broken the interview into sections to make it easier to navigate.

Mark, what is your assessment of how markets, and growth stocks in particular, have performed in recent years?

The period coming out of the crisis has been very, very strong. A lot of companies that we’ve done well with were really bombed out back in 2008 and 2009. We were starting from a very, very low base so I think from 2009 onwards one would have expected to do pretty well.

Since the crisis our approach has been to assume that life would be tough, and I think for the average business life is very tough. Having said that, zero rates have helped and certainly it could have been an awful lot worse. But the key thing is that coming out of the crisis valuations were so low that it didn’t surprise me that a lot of companies went up multiples.

On current market conditions...

Conditions have been a little more unsettled in 2016 so far. What’s your…

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Disclaimer:  

As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested. ?>


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10 Comments on this Article show/hide all

bsharman 11th Mar '16 1 of 10

THANKS BEN! I'm going to enjoy reading this.

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David Knight 11th Mar '16 2 of 10

VG and his fathers book opened my eyes; moved all my different pension pots that were doing nothing into a SIPP thats now growing as result of reading it... just wish I had read it much earlier!

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djbilywiz 11th Mar '16 3 of 10

Great interview, very interesting. Thanks.

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Sully8786 11th Mar '16 4 of 10

Yes, cheers Ben - fantastic interview :)

Company: Dave Sullivan - Talking Stocks
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Whitbyview 12th Mar '16 5 of 10
3

Enjoyed reading this but the question I would want to know the answer to is what Mr Slater thinks of the Stockopedia Zulu Princliple screen and whether any of the shares are in his fund. I don't think any of the top 10 holdings are suggested by the screen. Maybe I just misunderstood but welcome any thoughts on this.

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Tom Firth 13th Mar '16 6 of 10
5

In reply to post #123758

Hi,

Please do checkout this help article:

http://help.stockopedia.com/knowledgebase/articles/53496-are-these-lists-of-stocks-selected-by-the-original

That explains quite well what the Guru screen is in that context - there are a lot of other articles about the guru screens too explaining how they are constructed and so on, well worth a read in my view before you let them influence any of your thinking!

In short, the screen is simply an independent study based on the rules in the Zulu Principle book, as far as they could easily be quantified. The Guru screens are automated after all and do not require any human input post inception. The tracked portfolio is set once a quarter using a maximum of 25 stocks from the screen at the re-balancing date. It is no surprise then that the stocks selected do not resemble Slater's portfolio!

This is not what the screen sets out to measure though, it simply attempts to test the broad principles championed in the Zulu Principle book in a dumb (yet transparent) quant manner. The screens are not endorsed in any way by the Gurus themselves.

As for what Slater thinks of the screen, I've no idea! Not sure if he and Ben discussed that...but the 22.6% annualised return to date in the UK market is hard to argue with!

Tom

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Whitbyview 13th Mar '16 7 of 10

In reply to post #123773

Hi Tom, Thanks for your thoughts. I understand where you are coming from and as you say, clearly many of the screens are based on the works of those no longer with us. That's kind of why I was interested to know what Slater thought of the screen though. I wouldn't expect him to endorse it in any way but would like to have known how true he felt it was to original concept. Thanks again for your thoughts.

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purpleski 16th Mar '16 8 of 10
4

Great article only wish it was longer!! One (he and his father) of the greats of the investment world and I mean world.

I read the book The Art of Execution very recently and the part on what to do when something goes wrong was one of the main takeaways I got from the book. After all if something goes right psychologically it is easy and right to sit and do nothing but so hard not to let inner emotions take over when something goes wrong.

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oscar247 29th Mar '16 9 of 10
1

A highly enjoyable and informative interview.

Mr Mark Slater is following in the footsteps of his highly esteemed and successful Father and fast becoming a legend in his own right.

Unlike some of his fellow fund managers, one really can't see, a man of the calibre of Mr Slater being hoodwinked by chancers and fraudsters.

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Bearbull 10th Apr '16 10 of 10

Thank you Mr. Slater for the insight and thank you Ben for this interview.
Mr. Slater mentioned a study of Richard Tortoriello. I found following link that might be interesting for further reading:
www.aaii.com/journal/article/quantitative-strategies-for-selecting-stocks

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