THREE months ago, one of America's two richest men was in a bit of slump - mainly for disregarding his own rules about how to grow extraordinarily wealthy. This week, the sage of Omaha, who began his business career installing pinball machines in a Washington barbershop when he was 13, showed why he may be the greatest investor alive. When the Walt Disney company pulled off the second largest US takeover on Monday, Warren Buffett's investment company profited by US$400 million on the day. And its shares in the television company Disney was buying - Capital Cities/ABC - was worth $2 billion more than Buffett paid for them. Not bad for a man described by Time magazine this spring as 'looking a little vulnerable'. The Disney-Capital Cities deal showed Buffett in typical form - mixing high finance with folksiness. When Disney boss Michael Eisner bumped into him at a meeting of top executives in a California resort and mentioned his interest in Capital Cities, Buffett led him off to have a bite to eat and a talk with the other company's chairman - not at a grand restaurant or in a boardroom, but at a picnic. The Buffett style has become legendary in a world of financial gloss. Its apparent artlessness looks too good to be true. The annual report of his investment company, Berkshire Hathaway, is famed for its dull, textbook presentation (page after page of text and tables bereft of photographs or flashy graphics). And for the chairman's letter. This has been compared to one of a Christmas round-robin letter recording what has happened to the family during the year and dispensing a few homilies. Buffett's constant message is not to try to do too much, to take things step by step, to be properly modest - and to look for long-term quality not short-term returns. Referring to himself and his partner, Charles Munger, he wrote in one recent letter to shareholders: 'Charlie and I decided long ago that in an investment lifetime, it's just too hard to make hundreds of smart decisions . . . therefore we adopted a strategy that required our being smart - and not too smart at that - only a very few times. Indeed, we'll now settle for one good idea a year (Charlie says it's my turn).' That tone runs through Buffett's life. While his rival for the richest man in America title, Bill Gates, has built himself a mega-million futuristic home outside Seattle, Buffett still lives in a house in Omaha, Nebraska, which he bought for US$32,000 in 1958. His holiday home in Laguna Beach, California was half financed with a mortgage. Berkshire Hathaway's staff consists of 11 people in a 14th floor office in Omaha, which until recently had no computers. The chairman, now 64, drives himself to work, wears polyester clothes, plays bridge, pays US$9 for a haircut and lives with a woman in her mid-40s who is reportedly described by neighbours as 'Warren's housekeeper'. His salary has long been fixed at $100,000 a year - but who needs a pay cheque when his wealth increased by $1.4 billion last year? 'If we were not paid at all,' Buffett wrote in one annual report, 'Charlie and I would be delighted with the cushy jobs we hold. At bottom, we subscribe to Ronald Reagan's creed: 'It's probably true that hard work never killed anyone, but I figure why take the chance'. ' Behind all this almost studied ordinariness is a man who, according to a Forbes calculation, was worth $9.2 billion at the end of 1994. Fresh estimates of his worth run over $10 billion, and the Disney deal may put him ahead of Gates in the wealth stakes. A $10,000 investment in his business when he started in 1956 is worth some $80 million today. The Oracle of Omaha has achieved his riches - and made hundreds of investors into millionaires - by following a few simple rules. As his letter to shareholders indicates, he makes few investments compared with Wall Street fund managers - 'lemmings', he calls them. He picks targets carefully, looks for good management and sticks with chosen stocks for as long as it takes. Initially, Buffett followed the teachings of an early stock market guru, Benjamin Graham, who urged investors to identify companies whose share value was less than their real book value. Finding such companies became harder as Buffett grew big and famous. He is said to have bought a huge discount furniture business based in Nebraska on the basis of the owner's word. More usually, his approach involves thorough research which leaves him knowing more about a company than its chief executive. The results live up to the legend. Berkshire Hathaway - the name comes from a textile mill Buffet and partner Munger bought in the 60s - owns about 10 per cent of American Express and Gillette. Its 100 million shares in Coca-Cola, bought for $1.3 billion in 1989, are worth $5 billion (appropriately one of Buffett's favourite meals is a burger washed down with Cherry Coke). A 15 per cent stake in the Washington Post company which cost just under $10 million is now worth more than $400 million. But early this year, there were signs that Buffett might be stumbling. A few of his investments looked decidedly unappealing, and some thought he had only himself to blame. What was most worrying was that he seemed to have forgotten his own precepts. The king of painstaking research put a disappointing investment in USAir down to 'sloppy analysis'. At Salomon, the parent company of troubled investment bank Salomon Brothers in which Buffet has invested $1 billion, he broke another rule about not getting involved in management by acting as temporary chairman and staying on as a director. But the Disney deal has put him back on top: in the words of one admirer, proof that good guys do sometimes finish first. 'Lethargy bordering on sloth remains the cornerstone of our investment style,' Buffet declares. As if anybody believes him.