Secrets of the Temple Summary and Analysis

In the fall of 1988, Buffett began to quietly purchase Coca-Cola stock. The CEO caught on but agreed to remain quiet until Buffett had purchased all he wanted—7% of the company for $1.2 billion. In making the decision to purchase Coke, Buffett used his refined principles of investment, based upon minor revisions of his original guru, Graham:

1. Do not consider the trends or forecasts given by the Wall Street analyzers—focus only on the long-term value of the company;

2. Invest in companies whose business you understand—if you do not understand the business, you cannot determine its value;

3. Research management of the company—managers who see themselves as true caretakers of stockholders' money are good ones;

4. Study the company yourself—do not rely on so-called "expert opinions" of others;

5. If you develop...