Zulu PrincipleHerbalife Ltd.NYSE:HLFGabrielAmadeusLauJim Slater beat the market for decades by systematizing quality + reasonable price + momentum—first via a 1960s “earning situations” turnaround playbook, then (1992+) via the Zulu Principle: small/mid caps with fast EPS growth, efficient capital use, cheap vs growth (low PEG), and RS strength, managed by strict quarterly rebalances. The two playbooks 1) “Capitalist” (1960s turnaround) Yield ≥ 4%, EPS up in ≥4 of 5 years, EPS ≥ 2× in 4 years Optimistic chairman’s statement, sound liquidity, no exceptional vulnerabilities Reasonable asset value, not family-controlled, voting shares Spirit: early GARP before it had a name—cash-generative, improving earners with robust balance sheets. 2) Zulu Principle (1990s, refined & timeless) PEG < 0.75 (value vs growth in one metric) P/E < 20 EPS growth > 15% 12-mo Relative Strength > 0% (price momentum) ROCE > 12% (quality/efficiency) Market cap £20M–£1B (small–mid where “elephants don’t gallop”) Quarterly full rebalance: buy all qualifiers; sell anything that drops off; no in-between adds. Why it still works Aligns with the three empirically robust factors: Quality, Value (vs growth), Momentum. Captures post-earnings-announcement drift by favoring positive EPS surprises and upgrades. Rules ≫ opinions: removes emotion, enforces discipline via scheduled rebalances. When few names qualify (tight markets) Relax one notch (e.g., PEG < 1.0, P/E < 25, ROCE > 10%). Widen geography (apply the same screen across EU/US/ROW). Layer news filters (earnings beats, trading updates) on top of the screen. Ready-to-run screen: https://www.tradingview.com/screener/b8Gx5XMl/ Universe: your domestic market + optional global small/mid PEG (1y forward EPS growth) < 0.75 P/E (TTM or forward) < 20 EPS growth (TTM or forward) > 15% Relative Strength (12m vs market) > 0% ROCE > 12% Market Cap , 1.1x USD Liquidity guardrails: £5k ~ £20k Daily Volume Sanity Check: Golden Cross, Price above 50/200 DMA Portfolio construction & rules Quarterly rebalance (strict): equal-weight all qualifiers; sell anything that no longer qualifies. Max names: 20–40 (equal weight); if >40, rank by lowest PEG → highest RS → highest ROCE. Risk: position size so any single name ≤ 5% weight; optional 15–25% stop from entry if you want overlays. Costs/slippage: use liquid names (ADV filter) and quarterly cadence to keep friction low. Upgrades you can test Replace RS>0% with 6-Month RS > 5% or 12-Month RS > 10%. Add Net debt/EBITDA < 10× (quality balance sheet). Require positive estimate revisions in the last 3 months. Momentum overlay: require price above 50/200-DMA to avoid value traps.