The Warren Buffett Investment Principles
How These 6 Simple Questions Have Made Warren Buffett Wealthy

By Steve Christ
Thursday, February 14th, 2008

Forget Coke. Forget McDonalds. And you can even forget the queen of talk Oprah Winfrey. That's because when it comes right down to it the best brand in the business belongs to Warren Buffett, that grandfatherly billionaire from Omaha, Nebraska.

That's true now more than ever up on Wall Street, where the investing classes hang on his every word these days as they continue to come to grips with the dangers of a sub prime contagion that was never contained.

Of course, to the set of value investors that have been following Warren Buffet's investment principles for years, all of this renewed attention probably comes as no surprise at all. There is a reason after all that he's called the Oracle of Omaha.

But with the mortgage related mess now threatening to take the markets even lower, and investors of every stripe looking for a savior, Warren Buffett's billions, and his stellar reputation, may be just the answer that the markets are looking for.

And while Saint Warren certainly isn't going to save the market from all of its excesses, (not even he has that much money) he may just be able to bailout the only portion of the bond insurance market that is worth saving. That alone would be likely be enough to bring the markets back from the current abyss.

Warren Buffett to the Rescue

In fact, just two days ago the mighty weight of the Buffett Brand was on full display, when he called Becky Quick and the gang on Squawk Box for a little chat. The Dow futures, by the way were solidly in the red at the time.

It was during this chat that Buffett revealed that the his company had approached the three largest bond insurers last week - Ambac Financial Group Inc. (NYSE:ABK), MBIA Inc.(NYSE:MBI) and FGIC Corp.--offering to reinsure about $800 billion in municipal bonds in order to allow them to maintain their triple "AAA" ratings.

Of course, at the very moment he uttered those words the futures staged a big comeback going green to the tune of 72 points in an instant.

That green tide, not surprisingly, carried on into the day's trade as the markets rallied on mere hope of a Buffett solution, even though it was nothing more than a proposal. And in fact, one of the three troubled insurers had already turned him down, which wasn't surprising considering that he was basically asking them to fall on their swords.

Nonetheless, investors were warm to the idea of a Buffett solution, hopeful that it could alleviate one of the major market fears that have weighed heavily on the financial markets. "This would just eliminate one major cloud from the market," said Buffett on the call, and the Street agreed.

It was, in short, just part of what might be the master stroke in a legendary career spent buying things on the cheap.

In fact, when it is all said and done, it wouldn't surprise me one bit if Buffett's newly found bond insurer is practically the only one left standing-that's how downtrodden the bond insurer have become and how decisively Buffet has acted.