Interview: Millions of shares, but not many laughs: Jim Slater is proud of six things that might get him into heaven. Being chairman of Slater Walker is not among them

WHATEVER happened to Jim Slater? You know, of Slater Walker fame, financial miracle workers. For a briefish moment, Mr Slater was the most influential and controversial man in the City. At the height of his power in 1972, after many takeovers, he had built up a firm worth pounds 200m, the largest of the new merchant banks that dominated the City merger and property boom of the early Seventies. Then came the tears, for property prices crashed and Slater Walker had to be rescued by the Bank of England. The Walker part, now Lord Walker of Worcester, had left long before in quest of ministerial fame, and today doesn't mention Slater Walker in Who's Who. Mr Slater's modest entry includes 'Chm, Slater Walker Securities, 1964-75' - but he himself seemed to disappear once the fall came.

He is awfully well, exudes affluence, looks pretty fit for 63, residing in a 17th-century mansion near Haslemere in Surrey. Still has that cold stare, sitting in his armchair as if to attention, hands clasped, lips tight. His head appears slightly too big for his body, making his frosty countenance seem even more alarming. Heh up, we've got a desiccated calculating machine here, I thought, as he beckoned me to a chair. This is going to be hard work.

The next two hours were not easy, as he clearly finds most people pretty stupid when it comes to his speciality. His children complain that he will repeat instructions three times, whether to his gardener, chauffeur or wife and family. No one could call him a bundle of fun.

And then, as he was driving me back to the station, I happened to say something, not at all funny, which had him roaring with laughter, so much so that I feared he would crash. Funny man.

Brought up in Wembley, north London, only son of a jobbing builder, local secondary school, good at maths, keen on chess, fond of stamp collecting, left at 16 to become an accountant. After two years of articles, gave it up and did his National Service. 'I found accountancy very difficult and feared I wasn't going to pass my exams. I wanted to break out, get away from home.' Two years in the Army changed him - back to the serious, solid, logical, hard- working young man he was always going to be. 'In the Army, I met many no-hopers, going nowhere. It made me realise I must get down to it.'

Qualified as an accountant, moved into industry in 1953 with a small metal-finishing firm, salary pounds 600 pa. Overnight all the seniors in the firm were sacked for various misdemeanours, and at 24 Big Jim was the boss. In two years, he turned round an ailing firm. 'My strength was in seeing things in black and white. Everything was very clear to me in those days. Now I see shades of grey, unless it's shares.'

He rose to deputy sales director of British Leyland, then in Spain he caught a virus that laid him low for two years. 'It made me feel I might be unable to earn a living. I only had pounds 3,000 in savings, so I began to look for an outside way of making some money.' He considered stamps, his old hobby, and devised a plan to corner the market in the 7s 6d olive green from the Australian navigators issue of 1963. 'If I could buy almost all of them, collectors would have had to come to me to complete their set, and I'd set the price.'

Instead, he adapted the same principle - specialising in something the big dealers overlook - to stocks and shares, a subject he knew nothing about. He bought two years' back issues of the Investors' Chronicle and the Stock Exchange Gazette and read every one. 'What I learnt enabled me to buy my first shares and make pounds 40,000.'

Personally, I said, I think I'd rather not make pounds 40,000, if it meant reading two years of back numbers of such boring publications. Not a flicker of a smile. Instead, he insisted on taking me through his theories - explained in his new book The Zulu Principle, a treatise aimed at those who already know something about the markets, helping them to make extraordinary profits from ordinary shares, so he says.

'By looking back, I could see patterns in shares that later did well, and those that did not, and tried to analyse the common factors. The most important thing is to find a share which has been growing at above-average rate, has above-average prospects, and yet is anomalously priced on a below-average multiple of earnings.' But why can this happen? Are there not thousands of clever-clogs analysing every little share? 'The market is not perfect.'

He spent a year playing the market in his spare time and did so well that he wrote to the Daily Telegraph, offering a share-tipping column. 'I met their City Editor, Nigel Lawson, and liked him. I thought he showed promise.'

You were wrong, of course, I said. A thin smile this time. He wrote the column for two years, following his own tips at the same time. 'It got to the stage where I began to resent my day job. I remember having to visit Finland and thinking I don't want to. I'd rather pay Donald Stokes (his boss at Leyland) not to go.'

He was named by the London Evening News as one of the nation's dynamic young people under 40. One of the others was Peter Walker, who organised a luncheon club for all the under-40 thrusters. He told Walker he was thinking about setting up on his own, investing in shares. They decided to do it together. The rest is history. The shares they bought shot up, especially when everyone else found out who was buying, and climbed on too. They took over sleepy companies, sold off their assets, then sold off the companies for more than they paid.

We'll jump to 1974, when the firm collapsed. It was partly due to the crisis in secondary banking and an extradition order from Singapore, where Mr Slater was wanted in connection with certain aspects of his firm's activities. 'It was a nonsense, and I won my case not to be extradited, but it killed confidence in Slater Walker, which had its problems anyway.'

He was left with assets of pounds 2m and debts of pounds 3m, making him a 'minus millionaire', a phrase he thinks he coined. Within two years he had paid off his creditors, with interest, mainly through property deals.

He also turned to writing children's books, including a series called A Mazing Monsters, little Mr Men-type books at 40p each. It began with him telling stories to his own children, then studying the market, testing plots on selected groups of children. Two million copies were sold. By 1978 he'd stopped. 'My children had grown up. I wasn't telling bedtime or car journey stories to them any more. Perhaps I'll come back to children's stories, when I have grandchildren.'

I studied a few of his little books, deciding his literary talents were

more Jeffrey Archer than Julian Barnes, but all the same it was a surprising diversion for such a cool character. 'Look, I could tell you a story now, making it up as I go along. I have a gift for narrative. I'm just not good at descriptions.'

Once his debts had been paid off, he devoted himself to more personal pleasures, though still with his shares and property. He took up salmon fishing and, being the chap he is, bought up river rights and turned them into time- shares. Three days a week, his chauffeur brings him up to London in time for lunch. He'll have a business appointment in the afternoon, then head for the Portland Club and play bridge for at least two hours, except on Mondays, when he often plays till midnight.

The rest of the week he is at home, taking it easy, though he does have an office and secretary. The share prices come through all day long. He has stayed at 11 1/2 stone, which is pretty thin for someone 6ft 3in. 'I prefer the word 'slim', if you don't mind. I use the Hayes diet - never mix carbohydrates with protein in any one meal. I have fruit for breakfast, a protein lunch with something like lamb, then a carbohydrate supper, perhaps new potatoes and cabbage, followed by bananas. Should I be invited out and it's steak and kidney pudding, I'd eat it - 20 per cent of the time you can eat what you like.'

He married Helen, formerly his secretary, in 1965 and they have four children. It was thanks to one of his sons, Mark, that he returned to writing. Mark asked him to recommend a stock-market book that wasn't a primer. Mr Slater couldn't find one, so wrote one himself. The title The Zulu Principle comes from his wife, who was once very keen on Zulus. 'They are a narrow subject in which she could have invested a lot of time and become a world expert. That's how I treat shares.'

Isn't it a bit boring, after all these years, continuing to play the market? 'There is not the excitement of my first deals, but I still get pleasure out of it. It happens to be what I do best. I can't help myself. It's what I'll do till I stop drawing breath.' When his last breath does come, and he is called to account for his life, how does he think he will score?

'There are six things I'm proud of, which could be fitted on a postcard and might get me into heaven. First, my early sponsorship of British chess. When I put up some money, we were 26th in the world without one grandmaster. Today, we are second and have 20 grandmasters. Through my charitable foundation I've also sponsored young tennis players. We've paid the fees for 11 boys to go to a public school and be professionally coached. One of them, Jamie Delgado, has just become the world under-14 champion.

'Third, I gave pounds 100,000 to Birthright when it was a struggling charity, and might have closed. Now it has the Princess of Wales supporting it. Fourth, I've taken the nets off several rivers, letting the salmon return freely. Fifth, I'm happily married with four attractive children. Sixth, my children's books. I thought they were worthwhile'.

Not a mention of Slater Walker? 'I'm not particularly proud of that. It failed, after all, but I'm not ashamed of it, either. I'm neutral. I don't deny asset-stripping, though the phrase is used as a smear, usually by spineless people who cannot manage their companies. If a firm has its assets stripped it means they have not been properly used.'

Now for that sudden bout of human- sounding laughter, just when I'd decided he was a calculating machine.

'Failure was obviously the best thing that happened to you,' I said as we headed for the station. 'Without it, first, you would now be unbearably arrogant. Second, you would not have tasted the full business cycle - failure is surely part of the process. Third, as a human being, it's allowed you to diversify and enjoy life much more.'

I thought the reference to arrogance would upset him - but that was the bit he roared at. 'Arrogant] I would have been impossible. Absolutely impossible.' I could still hear his strange roars of laughter as I got on the train.

(Photograph omitted)