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12 Basic Immutable TenetsAs we all know Warren Buffett may be the most successful investor in the world. Some people try to dismiss Buffetts prowess of picking successful securities on the basis of a certain class of luck or inside information that the regular small investor could never hope to have. However what many people do not understand is that, match to Robert G. Hagstrom, Buffett does not invest in stocks but in companies and their underlying businesses. and instead of luck Buffett uses his twelve immutable tenets. These twelve tenets argon broken into four sections of the companies 1) Business, 2) instruction 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 can come to a conclusion of whether or not 3M would ask an mesmeric investment to Buffett.The first group of Buffetts tenets is the Business tenets. The business tenets are broken into three areas of concentration. T he first business tenet is the business must be simple and understandable. 3M has thousands of different products, a few of which are simple (and thus interesting to Buffett) such as Post-It Notes, Scotch Tape, adhesives, and cleaning agents. But some of 3Ms another(prenominal) products are not as simple such as flexible circuits, and electronic and liquid crystal displays. These tallly technical products would be out of Buffetts destiny of confidence, products that Buffett does not know very much about and therefore Buffett would not be able to interpret and react to developments with as much confidence. The split second business tenet is that the business must have a consistent operating 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 involved in changing directions. 3M could easily be reason as having a consistent operating history as shown by its strong co re products (Post-It notes, Scotch tape, Scotch guard etc) which have dominated their commercialize for years. Also 3Ms consistency can be measured by its longevity 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 grocery store tenets, helps the investor decide if the price of the shares is acceptable. The first market tenet is deciding the quantify of the business. To value a business Buffett estimates a companies total future cash earnings and discounts the owners earnings by a riskiness 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 abutting 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 $35,085,216,000. Even if 3M grows at 5% per year the company would still be worth $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 below their indicated value. 3Ms value is calculated 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 falls to a level that would give a margin of safety.