“Elephants don’t gallop” (investment adage)
“Elephants don’t gallop” is an investment adage that Jim Slater (a former investment columnist for London’s Sunday Telegraph) made famous some time before 1993. Slater meant that large companies (“elephants”) don’t appreciate (“gallop”) as much as smaller companies. Some have criticized this investment strategy—the “elephants” pay dividends that the small cap shares often do not.
Rudyard Kipling (1865-1936) was referring to the real animals when he wrote “Elephants do not gallop” in 1891.
Wikipedia: Jim Slater (accountant)
James Derrick Slater (born March 13, 1929) is an investor.
Trained as a chartered accountant, he worked for Leyland Motors and became famous for writing an investment column in The Sunday Telegraph under the nom de plume of The Capitalist, where he described his own portfolio. In 1964 he started an investment company with Peter Walker, a Tory MP, called Slater Walker – in reality an authorized bank. He performed what became known as corporate raids on public companies. He was a friend and business associate of James Goldsmith.
Google Books
Life’s Handicap:
Being Stories of Mine Own People
By Rudyard Kipling
New York, NY: Macmillan and Co.
1891
Pg. 351:
Elephants do not gallop. They move from spots at varying rates of speed. If an, elephant wished to catch an express train he could not gallop, but he could catch the train.
The Independent (London)
Fleas have the jump on elephants
JIM SLATER
Thursday, 15 April 1993
I ONCE compared a very large company to an elephant and made the comment, ‘elephants don’t gallop’. To double the earnings of a pounds 10bn company takes years of hard work. To double a very small company is a much easier task.
I have searched for an analogy for shells to contrast with my elephant. The best suggestion I can offer so far is a flea that can jump over 200 times its own height - equivalent to a man jumping over St Paul’s Cathedral.
The Independent (London)
Fleas can bite you
JIM SLATER
Thursday, 17 February 1994
(...)
Even when selecting a conventional growth share, all other things being equal, I prefer small capitalisation companies. I work on the principle that doubling a market capitalisation of pounds 100m is a great deal easier than doubling a capitalisation of pounds 10bn. To illustrate this, I coined the phrase ‘Elephants don’t gallop’.
Google Books
500 of the Most Witty, Acerbic and Erudite Things Ever Said About Money
Edited by Philip Jenks
Petersfield, Hampshire (Great Britain): Harriman House
2002
Pg. 8:
“Elephants don’t gallop.”
Jim Slater, explaining why he prefers small cap shares
The Times (London)
September 6, 2005
Galloping elephant that won’t follow the herd
By Magnus Grimond
ANTHONY BOLTON’s Fidelity Special Situations Fund defies the laws of investment gravity. The received wisdom is that large investment funds are too lumbering to outperform the rest of the market. In the words of Jim Slater, City wheeler-dealer turned investment guru, “Elephants don’t gallop”.
New York (NY) Times
BP reports 22% profit drop in fourth quarter - Business - International Herald Tribune
Published: Tuesday, February 6, 2007
(...)
“There’s an old saying — ‘elephants don’t gallop’ — and it’s very hard when you get to a big size to actually meet the expectations of 10 percent growth people are looking for,” Brough said, adding: “BP has been a disappointing investment.”
The Money Times
7 Market Myths Exposed
by Motley Fool - August 7, 2010
(...)
6. Elephants don’t gallop
“Elephants don’t gallop” was Jim Slater’s explanation for why he prefers small-cap investing.
Alas, over the past 10 years, the FTSE SmallCap Index is down 17%, versus a 15% decline for the FTSE 100 index. In addition, FTSE 100 members pay much higher dividends than smaller companies, so you’d have been much better off in blue chips than tiddlers over the past decade.