(MONEY Magazine) – It's goose-bump time inside Omaha's Aksarben Coliseum as America's favorite fat cat leads a knot of bodyguards and cameramen toward his rendezvous with 7,700 ecstatic stockholders gathered for Berkshire Hathaway's annual meeting. The company's logo--a fistful of dollars--lights up a pair of giant projection screens, while the strains of Crosby, Stills, Nash & Young provide just the right tone of worldly bliss for the festive crowd now on its feet to welcome their famously folksy chairman. "I'm Warren Buffett," deadpans the 66-year-old, $15.3 billion man of the hour. "As if you don't know that already." The crowd lets out a roar of delight.

The giddiness is understandable. In 1996, Buffett's publicly traded investment vehicle, Berkshire Hathaway, added 36.1% to its net worth (year-end market value: $41 billion), and the company's stratospheric class-A common stock hit $38,000 a share, gaining 88% in a 14-month period. In the 32 years since the legendary value investor took over the once failing New England textile manufacturer and converted it into a holding company, he has made millionaires out of hundreds of the stockholders assembled at Aksarben (that's "Nebraska" spelled backward, folks). A mind-boggling 80% of the shares (including Buffett's own 39.7% personal stake) are held by owners who bought them 20 or more years ago for less than $100.

Although it is unlikely (some would say impossible) for Berkshire stock to repeat that kind of performance over the next 20 years, the unassuming Buffett, his astounding record and his deceptively simple investing principles remain the envy of amateur and professional stock pickers the world over. That's why so many of his shareholders make the pilgrimage to Omaha each spring. And that's why MONEY journeyed there too--to pick up lessons that can enrich you just as they have Buffett and his partisans.

Part religious camp meeting, part Boy Scout jamboree, the annual assemblage draws Buffetteers of every persuasion from all 50 states and numerous overseas places, from Saipan to Saudi Arabia. Ranks of returnee A-share owners merge with neophyte holders of the cheaper ($1,419 as of May 29) Baby Berkshire B shares, which were issued last year.

"In this crowd, Buffett is a messiah," says true believer Frank Betz, managing director of New York City investment counselors Carret & Co. "It's like he's the prophet, and the shareholders are the disciples." Adds Jim Lipsey, 76, who lived a few blocks away from Buffett during the 1950s, bought stock at $40 and held on for decades: "If anybody stood up at this meeting and bad-mouthed Warren, he'd be stoned."

During the mid-1970s, when the chairman knew most of his stockholders personally, the gathering was held in the lunchroom at the local National Indemnity Co. Now, thanks to the mushrooming size of Berkshire's buy-and-hold fraternity and the down-home boosterism of Buffett himself, the event has evolved into a three-day weekend extravaganza that he has dubbed the Woodstock of capitalism.

The movable party commences Saturday evening with the Buffetteers singing "Take Me out to the Ball Game" at Rosenblatt Stadium, home of the triple-A Omaha Royals. While the teams are on the field doing their Bull Durham routine, Buffett, a part owner of the club, sits in the crowd signing T-shirts, programs and dollar bills. "Will you sign my $100?" asks Wayne Elmer of New London, Wis."I wouldn't sign anything else," says the chairman.

On Sunday, the visiting investors descend on Borsheim's, the largest-grossing nonchain jewelry store in the country, which Berkshire bought in 1989 for an estimated $60 million. Men and women ogle items like a $3 million diamond necklace with 103 carats of pear-shaped D (flawless) sparklers, and many satisfy their urge to splurge by purchasing $325 pendants and $50 key rings designed as gold-and-silver stock certificates. Time and money are also spent at another Berkshire holding, the Nebraska Furniture Mart, where the founder, 103-year-old discount dynamo Rose Blumkin, offers deals on $599 sofa beds from the comfort of her mobile electric cart.

The final ritual stop is dinner at Gorat's Steak House, a festive mob scene, where out-of-towners wangle over seat assignments so they can casually observe the World's Greatest Investor ingest $17.95 worth of rare steak and a double order of hash browns.

The man in the center of the celebrity circus does his best to conduct himself as a mere mortal. But it's tough. He's surrounded by investors who believe he can do no wrong because he's made so much money for them. Michael Assael, a lawyer and C.P.A. from New York City, confides that he gets "psyched" every time he contemplates Buffett's amazing track record. He has a Buffett museum at home that includes a display of license plates, starting with 100 BRK. "Every time Berkshire stock goes up another $10,000," beams Assael, "I order another plate from the state."

The same tension between Buffett's affable restraint and his followers' enthusiasm prevails at the annual meeting that formally convenes on Monday morning at 9:30. It's both a seminar and a celebration. The coliseum's doors open well beforehand at seven, and in its anterooms visitors indulge in a frenzy of discount shopping for irresistible Berkshire products, such as $9.95 boxes of See's Candies and $20 six-piece Ginsu knife sets. They swarm the billionaire's daughter Susie, 43, who is selling $12 fistful-of-dollars T-shirts to defray the cost of stockholder perks like doughnuts and coffee.

Inside the hall, the crowd responds with glee as Buffett conducts the nine-minute business portion of the meeting like a sitdown comic: "All those in favor of the slate signify by saying aye. All opposed say, 'I'm leaving.'" And they eat up the chipper byplay between the emcee and his cantankerous alter ego, Charlie Munger, Berkshire's 73-year-old vice chairman. The pair's first revelation: The name of the Berkshire corporate jet has been changed from the Indefensible to the Indispensable.

During the ensuing six-hour disquisition, rather than stoking the fired-up crowd, Buffett intentionally puts a damper on them. Yes, the year's results were very good, he says. Buffett notes that Berkshire's book value--one of his favorite measures of a company's worth--increased 8.8 percentage points more than the S&P 500's did last year. "But," he says, "the historic gains cannot continue."

Berkshire has become a prisoner of its own success. Buffett has flourished by making a relatively small number of spectacularly successful investments. As a result, though, he now has such a huge amount of money to deploy that he would have to make winning investment bets on an unprecedented scale to maintain Berkshire's extraordinary growth rate. "Fewer than 10 businesses in America have larger capital," wrote Buffett in this year's annual report, "and an abundance of funds tends to dampen returns."

What's more, says the Great One, the company's results have been accelerated by an unprecedented bull market tail wind. Warns Munger: "There is bound to be a regression toward the mean." How much? "It wouldn't surprise me at all if market returns average 4% a year over the next decade," says the chairman.

Gulp. That's a downer. But the dour prognostications don't faze the faithful. The most common reaction is: He always says that; Buffett's just underpromising so he can overdeliver. And the optimists are winning so far. On the day of his sober remarks, the stock went up $1,000, and it has continued to appreciate (price as of May 29: $42,300).

Whether or not stockholders heed the chairman's cautions as much as his extraordinary deeds, his investing principles have made a profound impact on his followers. Pros and private investors alike, as Berkshire owners they have attended Buffett's annual "seminars," absorbed his eggs-in-a-few-choice-baskets strategy and made money imitating him. As they tell it, there's wisdom here to inform an investing lifetime. It's a matter of just sticking to these six simple, interrelated rules that capture the Buffett approach:

--Buy a stock as if you were buying a business. Make your purchase the way you would if you were investing in an apartment house or a hamburger franchise with members of your family. In other words, think like a prospective owner, not a trader. "An owner thinks long term," says Andrew Kilpatrick, a retail stockbroker in Birmingham who followed Buffett so closely as to write and publish a 761-page book about him--Of Permanent Value: The Story of Warren Buffett ($30, plus $5 shipping and handling; 888-289-2573). "If you think in terms of years and not months," says the author, "you can focus on the quality of the company instead of the price."

--Invest in companies whose business you understand. If you can't explain in three sentences what a firm does and why it's consistently successful, don't buy it. Buffett didn't become the second wealthiest American capitalist by trading high-tech stocks. Far from it. He outright acquired or bought stakes in superior firms in prosaic industries: uniforms (Fechheimer), vacuum-cleaner brushes and bags (Cleveland Wood Products), newspapers (Buffalo News, Washington Post), insurance (Geico) and razor blades (Gillette).

--Look for steady performers. "Above all," says Kilpatrick, "Buffett values predictability." You don't need an M.B.A. or the ability to read spreadsheets to pick a winner. You just need to be able to make a reasonable forecast about where the business will be in five or 10 years. The key is to determine whether you can count on the company to produce reliable earnings. That requirement usually eliminates fledgling innovators, momentary high fliers and companies tied to the fate of cocoa beans or the ruble. Instead, you want companies that boast strong brand identity, honest management, limited debt and muscular marketing.

--Buy quality companies with a sustainable market advantage. One thing that helps ensure steady earnings is market dominance. It's what Buffett calls mind share. "You look for certainty of demand," says professional investor Michael Assael (the license plate man), who calls the homily-dropping chairman the greatest professor anyone could have. In Berkshire's case, that certainty is enhanced by the company's stake in powerful global brands like Coca-Cola and McDonald's. "Coke stands for something pleasurable to people around the world," says Assael. "It has a privileged position in the mind of the consumer."

--Don't worry about fluctuations in your company's price. In the short run, the securities market is a voting machine, with millions of daily ballots telling you what your stake is worth. In the long run, it's a weighing machine--meaning that over time the market will reward truly solid companies and disdain the showy lightweights. "The stock market is there to serve you, not instruct you," Buffett declared during his discourse. "As an investor, you should treat Mr. Market's volatility as a plus. You have a huge advantage if he's a heavy-drinking manic-depressive, because any large swings will offer you attractive prices." And getting specific about the Berkshire portfolio: "I don't care if the New York Stock Exchange closes for a year," he said matter-of-factly. "I just want to know how well Coke will do in five years."

--Hold on for the long term. Be like Ryan Bell, a 29-year-old B shareholder from Philadelphia. "My rule is Buffett's rule," says Bell. "If you don't want to own a stock for 10 years, don't hold on for 10 minutes."

Or follow the lead of Phil Carret, the ultimate long-term investor. Carret, 100, is a Wall Street legend, a W.W. I veteran who's seen too many wars, two stock market crashes and more bull and bear markets than there are pundits on CNBC. He holds stocks like Greif Bros. (a packaging company) and Standard Horse Nail (which makes fasteners, like cotter pins, for engines and farm equipment) that he purchased as long as 70 years ago and has tenfold gains in stocks too numerous to mention. "Why sell?" asks Carret. "They look as good now as the day I bought them."

Carret purchased 400 shares of Berkshire for around $400 each in the '70s (he knew Buffett's father, a stockbroker). Today his original $160,000 stake is worth some $17 million. But there's no way he's cashing in his chips. "If you like a company, you should keep it," says this Buffetteer born in 1897. "My favorite holding period is forever."