Warrent Buffett, investor extraordinaire, just bought something. The Burlington Northern Santa Fe Railroad Company (BNI). It cost $26 billion. He already owned part of the railroad, but he wanted it all. Figured it was a great investment. So why should you care?

First, because it's Warren Buffett. While he's made one or two bad investments (see Eastern Airlines (who?) as an example), most of what Mr. Buffett buys increases in value. He's not the second richest man in America because he's lucky. When he buys into an industry, it may be one that most investors should consider.

The federal pay czar is doing his job. He's cutting enormous paydays for executives of banks and other institutions that took TARP money. That's as it should be. Those banks performed terribly. Several would have simply vanished if the government hadn't bailed them out. Since capitalism is all about rewarding risk and merit, these executives don't deserve extraordinary payments.

But there is a concern that investors need to think about. It has to do with the human side of this equation. Consider this: if you're an executive who has a contract that states exactly how you get paid and you meet those standards, you would expect payment. That's why there are contracts. You and your department may have been one of the few groups that contributed to earnings, helping mitigate some of the losses other departments generated. While you may feel a twinge of "team" spirit and be glad that you've helped, you don't feel it deeply enough to believe your contract should be violated.

Apple Inc. (NASDAQ: AAPL) just reported unbelievably good earnings in an unbelievably bad economy. Fiscal fourth quarter results were up 46% compared to the same quarter last year. Investors liked what they saw and pushed the stock over $200 a share in after market trading. How can Apple deliver great earnings while almost everyone else is struggling?

Investors can learn a lot from studying Apple and applying it to all their stocks. While it is a high tech company, it has attributes that all great companies share. Here are some of them.

Many investors need income, especially as they reach retirement. They look for ancillary cash flow to supplement their Social Security payments and any retirement benefits from a company for which they've worked. But those aren't the only investors who should be interested in income.

That's because studies show that dividends are a significant contributor to overall performance of a stock. When held for years, a stock's dividend can help diminish the volatility of a stock's price and keep returns reasonable, especially in down markets. Here are five stocks that have decent income as well as potential capital gains. All are exceptionally financially strong.

Want to know if your stock is overpriced, maybe ready to take a breather? Then check its PEG. That's Price to Earnings to Growth, or the P/E ratio divided by the growth rate of a company's earnings. It's a quick and easy way to see if your stock may be ahead of its earnings power. It's also one measure a lot of momentum investors rely on as a screening tool.

If a stock's P/E ratio is well above its growth rate, they believe the stock is overpriced and won't touch it. But if the p/e ratio is well below the stock's growth rate, it could signal a bargain. It helps to know your stock's PEG.

No one thinks good times are here again. Unemployment is too high and will most likely get worse before everyone agrees that the recession is over. (If you're one of the many jobless who have been looking for months for a job, this is a depression, not a recession.)

No, times aren't good yet. But there are signs, both anecdotal and data driven, that show the worst is most likely over. Many of these signs aren't very visible. They don't make headlines, yet they do give credence to the idea that consumers are starting to spend, that the economy has stopped its downward spiral.

We're wrapping up the third quarter soon. Earnings will be out in October for most companies, certainly the largest names. They should look very good ... when compared to the third quarter of last year. And the fourth quarter will most likely look even better when comparisons are made.

There's the rub. The percentage increase in earnings will be strong for most companies as many of them wrote down assets, especially in the financials, last year at this time. Mortgages that weren't paying, loans that were way past due, they were losses. Every kind of asset a bank or thrift owned was under scrutiny. Many financials bit the bullet and wrote off large numbers, to get the bad news out of the way. Others nibbled at it, stretching out the pain over several quarters. By now many of those write offs have been taken, and those kinds of losses will be lighter, making earnings much better.

Mergers and acquisitions are hitting the headlines. Walt Disney Co. (NYSE: DIS) just bought Marvel Entertainment for $4 billion. The biggest one recently is the Kraft Foods (NYSE: KFT) bid for Cadbury's at $16.73 billon. It wasn't accepted, but that doesn't mean it won't eventually happen. And Hershey Co (NYSE: HSY) certainly isn't going sit idly by and watch what happens. It may have ideas of its own for Cadbury.

You may think these big deals have no connection to your stocks since you don't own them. But you're wrong. This M & A activity has a very positive influence on all stocks, directly and indirectly. The more mergers there are, the better the stock market will do.

Unlike Commissioner Gordon who can send out the Bat signal to call his helpmate against crime, there is nothing investors can do to summon aid in times of stress. They have to go it alone. But they can be armed with intelligence that helps. Here are few of the most prominent data points that will make a difference for all stocks, a macro perspective that should make navigating the stock market highway a little easier.

However, taken on a one-time basis, these aren't going to solve the mystery that is the market. Rather, data has to show a trend before it can be used. Even then, a trend stops and another begins. So even though the trend can be your friend, it can just as easily turn and become your enemy. As they used to say on Hill Street Blues: Be careful out there.

We've seen the market move up in a rather dramatic way since March, which is somewhat logic defying because most of the news has been bad over that time.

Certainly earnings weren't anything to shout about, but many of the forecasts sounded optimistic. Unemployment keeps growing. That's never good for the market. Housing lately is starting to find footing, stopping the continuous slide of lower prices, but over the last 18 months it's been in a depression. So with all the bad news, can the market keep its momentum?

Most likely it will. That's because the market looks ahead by at least six to nine months, and ignores the here and now. With the latest economic data and the re-appointment of Benjamin Bernanke as the Fed chief, investors have reason to believe there are numbers, not just hope, behind the latest market moves.

Most investors got slammed last year, down 50% or more in their investments. Didn't matter if they owned stocks or real estate, they got hammered. Many have to start over. And if they're near retirement, it's scary. Years of patient investing wiped out, gains that were made over a long time disappeared frighteningly fast.

But now it's time to begin fresh, to rebuild. What's the safest way to regain some or all of the losses without suffering another wipeout?

Biotechs are fascinating. They have such great promise, yet very few of them actually turn those promises into money. Cures for all types of cancers always seem imminent with promising (there's that word again) results from mice or small control groups. Phase I testing is completed and all kinds of good stuff seems possible. Then something usually happens. Usually not very good things.

Most of the time, it's discovered that what works in mice doesn't work in men (or women). Or that the group was too small for meaningful data and when a larger group is studied, the efficacy isn't there. Or as soon as there's a bounce in the stock price, much more stock is issued and dilution occurs.

The stock market is putting on quite a show, had the best month (in July) in years. Earnings weren't all that great either. Most companies reported about what was expected (lower than last year) with a few exceptions like IBM (NYSE: IBM), GE (NYSE: GE) and especially Coca-Cola (NYSE: KO). Earnings don't explain the enthusiasm investors are showing for all stocks. That comes from a renewed sense of hope, with some data behind the emotion.

Almost every company that made earnings announcement so far said the same thing: the worst seems to be over. They could see where sales were holding, a few were even reporting increases, though not many. But the clear majority said they could see the end in sight for the continuing downward spiral of lower revenues, more lay-offs, continuing cuts in spending.

You've probably seen or heard about all the money the federal government has loaned to banks, whether through TARP (Troubled Asset Relief Program) or other acronyms. Hundreds of billions of dollars flowed into the banking system through the back door. Yet very little of it seems to be going out the front door to consumers for mortgages or cars or other reasons for which we all used to borrow. What are the banks doing with that money and why aren't they getting looser with credit instead of tighter?

Two things dominate all others for banks: yields and capital in reserve for potential losses. Yields have to do with making the most return for the money loaned. Right now that isn't in new mortgage originations. With yields below 6% for most mortgages, there's little incentive for banks to make those loans. That's because there are plenty of other investments that yield 8%, 9% or more that are backed by mortgages and spread risk much better than a single family mortgage that relies on one or two people keeping their jobs to make the monthly payments. Those other investments are called mortgage backed securities.

Being a good to great investor doesn't take large brains, though they certainly help. The math is already done for investors at Web sites, giving the ratios and data that help form an investment decision. Most of the time the difference between winning and losing in the stock market has to do with personality quirks and emotional make-up rather than intelligence. Take the following quiz to see if you've got what it takes to be a winning investor in the stock market.

1. Do you have patience?
This is the rarest of all attributes on Wall Street. That's why it's rewarded the most. Investors who can withstand the temporary (hopefully) blows of a bad quarter from a good company will find that, over time, they will make money.