Investment Advice

THE ZULU PRINCIPLE. The connection between the Zulu peoples of South Africa and an investment ideology which can impact positively on your quest to crank up the profits from your stock market investments might not seem immediately obvious, but it exists all the same. The answer lies with one of a handful of financial gurus whose trading philosophies and methodologies are as applicable in many ways to everyday life as they are to the financial markets.

Jim Slater’s “Zulu Principle” is an ideology which advocates pouring a disproportionate amount of time and effort into a narrowly focused subject area in order to extract above average profits. So, if you read an article about Zulus, you’ll know more about them than me. If you read all the books in your library on the subject, you’ll almost certainly know more about Zulus than anyone else in your local area.

If you then academically research the subject, you’re likely to end up as an acknowledged Zulu expert. Go and live in a Zulu Kraal for six months, study their habits and customs at first hand, and you’re now on the lecture tour circuit earning very nicely thank you from your chosen area of expertise.

The point is this: There are a myriad of markets out there for us to exploit in our search for profits. To approach your investing from a professional – and a more profitable – point of view, first establish through a process of elimination what it is that you consider yourself best at. In short, find your own niche.

Discovering which markets you can apply your very own Zulu Principle to is a big step along the road to developing an edge. But you have to be prepared to look for it, identify it, and master it. Once you’ve done so, I can guarantee you that you’ll know more about your chosen market and its profit expectations – and how to exploit them – than most under pressure brokers or traders.

If you are serious about making money, then you need to shine a light in every dark corner, and leave no avenue unexplored, no stone unturned in your search for every scrap of information in your chosen area of expertise. Constantly strive to expand upon your own personal knowledge base.

The results are positive and many. Although your market coverage may narrow from your previous investment methodology, your general focus and your market knowledge itself will have deepened. Go deep, not wide. Performance will be stronger and more direct, and profits will accrue exponentially.

So don’t be a butterfly, flitting about carelessly from market to market, from trade to trade, alighting on one thing only long enough to flutter off again a few moments later and a few dollars lighter. If you want to be a pro and not a punter, then settle somewhere and develop your own speciality, your very own Zulu Principle.

Finally, as highly successful fund manager Carol Gallen once said, “The only people who make money in the long term are those who THINK they’ll make money.” That is to say, if you don’t think dynamically, laterally – and above all positively – you’re swimming against the tide from the outset. You CAN make healthy long-term profits from trading and investing, but you need to believe that you can, and most of all you need to believe in yourself.