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12 Basic Immutable TenetsAs we all know warren Buffett may be the most successful investor in the world. Some muckle try to dismiss Buffetts prowess of picking successful securities on the rear of a certain degree of luck or inside nurture that the regular small investor could never hope to constitute. However what many wad do not understand is that, according to Robert G. Hagstrom, Buffett does not invest in stocks but in companies and their underlying tradees. and instead of luck Buffett uses his twelve unchangeable tenets. These twelve tenets are unconnected into four sections of the companies 1) Business, 2) Management 3) Financial and 4) Market. By analyzing 3Ms annual report, its financial statements, and by examining all aspects of the company and its industry we set up come to a conclusion of whether or not 3M would make an enthralling investment to Buffett.The premier group of Buffetts tenets is the Business tenets. The business tenets are broken into three area s of concentration. The first business tenet is the business mustiness be simple and understandable. 3M has thousands of different products, a few of which are simple (and hence interesting to Buffett) such as Post-It Notes, Scotch Tape, adhesives, and cleaning agents. But near of 3Ms other products are not as simple such as flexible circuits, and electronic and liquid crystal displays. These high gearly technical products would be out of Buffetts circle of confidence, products that Buffett does not know very practically about and therefore Buffett would not be able to interpret and counterbalance to developments with as much confidence. The second business tenet is that the business must have a consistent operating(a) history. Companies with a consistent operating history are firms that are in a stable industry, have spent years producing the same product, and that are not currently mixed in changing directions. 3M could easily be categorized as having a consistent operating history as shown by its strong encumbrance products (Post-It notes, Scotch tape, Scotch guard etc) which have dominated their market for years. alike 3Ms consistency can be measured by its hugeevity in the fact that 3M was established over 100 years ago in 1902. The last of the business tenets is favorable long term prospects. Favorable long term prospects ca... ...he last group of tenets, the market tenets, helps the investor decide if the price of the shares is acceptable. The first market tenet is deciding the value of the business. To value a business Buffett estimates a companies total future cash earnings and discounts the proprietors earnings by a risk free rate (30 year T-bond). 3M had total owner earnings of $2,690,000,000 in 2003. If we assume that owners earnings will grow by 12% per year for the next ten years (which is what analysts predict as the industry as a whole is expected to grow 11% per year) we can calculate that 3Ms intrinsic value in 2003 would be $35,08 5,216,000. as yet if 3M grows at 5% per year the company would still be expense $25,780,818,000. The final market tenet, buying at attractive prices, is buying at a sensible price that will give your investment a margin of safety, and also buying at prices that are downstairs their indicated value. 3Ms value is compute at $63,480,000,000. This value is almost double our calculated intrinsic value, which would indicate to us that the stock price is too high and that 3M would not represent a good investment until the price move to a level that would give a margin of safety.