degree the cams. It's more accurate than clay testing and checks the clearance at each valve lift point not just at TDC. You then know how far you can advance the intake and retard the exhaust cam gears accurately.
how much margin of error should you leave yourself? can you further explain (or point me in the right direction) to get more info on the process of degreeing the cam to check valve clearance? i had an instructor of mine explain the clay process... but he didn't mention anything about using the cam degrees. it sounds like its a lot better, mainly for having the benefit of knowing how far you can advance/retard the cams, as well as know your safezone for valve clearance.
it depends on the cam spec, the piston dome valve relief depth that you are using, and whether your head has been milled or block has been decked or if you are using a thinner head gasket.
there isn't a set answer for everyone.
when you degree a cam you actually see at what advance you would have piston to valve contact.
there's several "how to degree a cam" articles on the web that you can find on google and so there's not much point in me retyping them.
you may want to see how they set up the degree wheel on the crankshaft, set up the pointer, and set up the valve lift indicator on cylinder #1, determine TDC, and then go to the cam's spec sheet to lock the cam gear at the opening and closing specs called for by the manufacturer. once you have those established, you can advance the cam gear and turn the crank manually slowly to see at what degree you get contact (during intake cam gear advance and exhaust cam gear retard). You then back off maybe 1-2 cam degrees from that to allow for heat expansion variation or mild valve float over time just to be safe.