(FORTUNE Magazine) – MANAGING /Cover Story

26 The Inside Story of Warren Buffett The legendary investor is also an ace at running businesses. Here's how he does it. by Carol J. Loomis

31 The Wisdom of Salomon?

THE ECONOMY

37 Fortune Forecast: Don't Be Alarmed by Slow Growth Homebuilding will pick up a bit this spring, and the improving U.S. balance of trade will supply long-term strength. by Todd May Jr.

42 Tomorrow's Jobs: Plentiful, But . . . ( Workers will need lots of training to get started, and still more of it to stay employed. by Louis S. Richman

CORPORATE PERFORMANCE

65 The Showdown at Eastern Air Lines The battle between boss Frank Lorenzo and the belligerent unions is getting fiercer. Caught in the cross fire: the passengers. by Kenneth Labich

68 Makeover for a Plain-Jane Retailer Carter Hawley Hale is spiffing up its old-fashioned stores with snappy merchandise and service. by Bill Saporito

71 Companies to Watch

SELLING

72 Would You Buy a Car From This Man? The race is on to build customer loyalty by improving the key link between dealer and buyer. by Thomas Moore

MONEY & MARKETS

76 Tokyo's Stock Market: Stronger Than You Think Those harrowing P/Es look safer when you adjust for accounting and cultural differences. Even so, buy with caution. by John J. Curran

81 Why We Should Save the S&Ls If the regulators' new rescue plan doesn't work out, stand by for a government bailout that could cost $50 billion. by John Paul Newport Jr.

POLITICS & POLICY

85 The Democrats: Tax and Win? An economic strategy of higher taxes and more social spending is taking shape. Will this be a Mondale replay? Maybe not. by Ann Reilly Dowd

TECHNOLOGY

90 Physics Whiz Goes Into Biz At 28, MacArthur Foundation genius Stephen Wolfram aims to get rich selling software. by G. A. Taubes

LOOKING AHEAD

96 Where Will We Put All That Garbage? As disposal costs skyrocket, more recycling is inevitable. by Faye Rice

4 The Editor's Desk

8 News/Trends & Travel goes up and up, Panama peril, a huge IPO, RISCy business, and more.

17 Letters to Fortune

103 Keeping Up by Daniel Seligman

117 Personal Investing How to ride the foreign takeover wave. by Peter Nulty

Bowater boom, desktops heat up. Portfolio Talk: Manager Pete Peterson of the Cardinal Fund.

123 Fortune People The Trump/Tisch/Davis show, an exit at Manny Hanny, Posner's portion, and more. by Nancy J. Perry

124 On the Rise

127 Books & Ideas The Binghams: how not to run a business -- or a family. by Richard Schickel

131 Office Hours Managers find plenty of ways to stifle innovation. Why? by Walter Kiechel III

Cover: Warren Buffett holds a bridge hand at the Manhattan apartment of Washington Post Co. Chairman Katharine Graham. Photo by Louis Psihoyos.