The Berkshire Contradictions
When you read about Warren Buffett and Berkshire Hathaway (BRK-A), there are times when everything seems to be a contradiction. You read about the strategy of understanding companies and being able to project long-term profits based upon that knowledge. It does't matter whether he was talking about buying a company outright or some of its stock.
At the same time you listen to Buffett talk about being willing to insure anything through his insurance companies - no matter what the risk - if the company is willing to pay the premiums that make that risk worthwhile.
The same with debt. Buffett won't borrow unless it's in long-term contracts at 
favorable rates. And yet you can't help think about the willingness to take on insurance payouts covering Lloyds of London recently.
What gives here? Sometimes it seems like there is no room for risk, and at other times it seems like he's almost betting the house.
Most of the seeming contradictions go back to favorable conditions. If Buffett doesn't get what he wants, he'll wait on it. Sometimes he's said that he's waited too long and it has cost the shareholders a lot. One was when he invested in Wal-Mart a while back. He bought some, and then when stock went up - even though he knew it was still a good buy - he didn't get into it more, and he said it was probably about an $8 billion mistake at the time for the shareholders.
It's not a perfect science, but Buffett has it down close. He understands how to read risks and he understands how to play the percentages within those risks.
He isn't gambling in any way, but rather with knowledge of the past and a fairly predictable future, there are things he can do that most people that don't operate using the same business philosophy can't. If you don't understand a business you're in fully, it's pretty hard to even be able to accurately measure risk. Buffett doesn't have that problem, most other people do.
Everything he does, even risk, is related to manageable predictability. It's the reason he continues on without changing to this day.
Other Buffett Sources:
MSU students have special visit with billionaire Warren Buffett
Sticking to what you know Core businesses
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