Gold, as an investment, is a tricky thing. It tends to be thought of as a safe alternative investment, as compared to stocks, mutual funds or other forms of investment. Given recent activity, I don't see that as a likely outcome.

In recent months, the value of gold has skyrocketed. As a price per ounce, the latest price was $1,104.30.00 per Troy oz. According to Goldprice.org, a site specializing in gold sales, shows price charts for various time periods. In the past year, the price per oz has risen from $852.70 to today's close, an increase of roughly 30%. That sounds like a great deal, but unfortunately it doesn't stand up when compared to stocks.

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"I don't like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I'll follow the lead of a restaurant that opened in any empty bank building and then advertised: 'Put your mouth where your money was.' Today my money and my mouth both say equities."
~ Warren Buffet, in a New York Times op-ed from October 17, 2008.

With the release in 2008 of the highly-anticipated biography of Warren Buffet The Snowball: Warren Buffet and the Business of Life, the somewhat unlikely cult of personality that is the Oracle of Omaha once again garnered attention. There are legions of Buffet adherents, and there is no doubt that his underlying principles are sound. He lives in the same house in Omaha that he bought in 1958 for about $31,500 and that today is valued at around $700,000. His stock picks have been similarly spectacular in many instances. But the Contrary Investor (that's me) would proffer that there are two very basic, very important distinctions in Mr. Buffet's investment process that followers simply cannot duplicate.

The following article was contributed via Seed.com, AOL's new platform for freelance writers.

Warren Buffett is one of the few investors in the world that has consistently succeeded where others failed. Part of his success is due to his common sense approach to the stock market. Investors have mocked Buffett for his old fashioned approach to investing when he sat out the dot com era bubble. But Buffett had the last laugh when others lost out during the bust.

Buffett also managed to largely avoid the major losses investors faced when they invested in securities dependent on subprime lending practices. In fact, he managed to profit from it.

Here are some principles Warren Buffett follows and investors would be wise to model:

As we move gradually closer to a stable economy where retail investors are again ready to enter the markets, we see a lot written about which stocks, sectors, and investment types are smart bets for future growth.

Money Magazine recently ran a piece in their Investor's Guide 2010 series entitled "10 Stocks That Can Keep Running," which offers three areas in which the markets are likely to be solid in the coming years. This author's opinion is they were mostly right. But there needs to be a little more explanation for the average retail investor.

Stocks are poised to open mixed on Tuesday as investors digest yesterday's big gains and the latest bit of economic data. The three major U.S. stock indexes were largely flat ahead of the start of trading on Wall Street. The Dow industrials and S&P 500 were each up about a point, while the tech-heavy Nasdaq was down slightly.

More economic data is to be released today, including a report by the Commerce Department on November factory orders due at 10 a.m. Eastern time. Consensus estimates call for a 0.1% rise for the month, according to Briefing.com. At about the same time the National Association of Realtors will release data on existing home sales for November. Expectations are that sales slipped 2% in the month, following a 3.7% rise in October.

U.S. stock markets are poised for gains Monday, the first trading day of the New Year. Investors are emerging fresh from a year of economic hardships, but one that also produced big gains for some. Ahead of the opening bell, futures on the bellwether Dow Jones industrial stocks were higher by 60 points, while those in the S&P 500 rose 7 points and the tech-heavy Nasdaq was up nearly 22 points.

The gains in part are a reaction to Federal Reserve Chairman Ben Bernanke's comments Sunday about the role low interest rates play in creating stock bubbles. Speaking at a conference in Atlanta, Bernanke said the housing bubble, which many have blamed on low interest rates in the early part of the last decade, would have been dealt with more effectively through regulation -- not interest-rate manipulation.

In the buyout corner of the private equity business, "dry powder" continued to grow in 2009. Industry slang for capital available for investment, this measure points to how much activity private equity funds are capable of completing.

From December 2004 through December 2008, according to data from alternative investment research firm Preqin, the amount of funds on the sidelines surged from $178 billion to $501 billion for the buyout sector, nearly tripling. This year, buyout dry powder only increased by $3 billion, to $504.28 billion. While this may feel like little more than a rounding error, it suggests stability in the sector after what has been a trying climate for financial services business of all types.

Last week I wrote about five things to fear in the stock market, going from the price of gold and what it portends to federal government programs and their consequences. This week, let's look at reasons to be positive about the stock market and what they might signal for 2010.

Employment is getting a little bit better. Nothing to get excited about yet, but still, the worst of unemployment seems to be in the past. Each month for the last six,, there have been fewer layoffs. The latest employment report showed that the service sector added 56,000 jobs while manufacturing was still losing them, though by a much smaller amount than in previous months.

As I write this, the Dow Jones Industrial Average closed up 126 points. A good day on top of a good year. Investors, as always, are looking ahead of today's headlines and determining that things will most likely improve in the next six months to a year, thereby feeling confident enough to buy stocks.

But things aren't all rosy, and the lights aren't all green. Here are some items to consider before you feel the need to fully invest in this market.

Despite largely positive corporate earnings reports, investor caution has set upon Wall Street. For the third straight day stocks are set to move into negative territory, with futures showing the three major U.S. indexes heading lower ahead of Thursday's opening bell.

Some blamed Wednesday's near 1% drops in the Dow Jones industrial average and the S&P 500 on a late-day sell-off driven by the latest Beige Book survey from the Federal Reserve that showed the economy is ever so slowly emerging from recession -- too slowly, it would seem, for investors.

Investors hoping to ride the climate change bandwagon have had a roller coaster ride over the past two years. Greentech stocks soared with the oil spike in 2007 and 2008, then crashed with stock market and commodity price declines in 2009. Since then, some of the most obvious stock plays have strongly rebounded. Many solar stocks have posted high double-digit gains since rebounding off year-to-date lows in March 2009.

The leading solar panel manufacturer, FirstSolar (NASDAQ: FSLR) has appreciated by 45% from lows of near $100 to a closing price of $154 on October 14. "I wouldn't be stepping into buying these stocks right now," says Pacific Crest senior analyst Mark Bachman, who covers solar stocks. Still, he rates FirstSolar as a market perform and considers it the best solar stock at present on his coverage list.

One of the most valuable commodities in the world is water -- without it, mankind can't survive. While more than 70% of the Earth's surface is covered by water, but 97% of it is saltwater and only 1% of the remaining 3% is readily available for consumption. Water is becoming scarce, and upcoming water shortages are emerging as the population of the world increases, particularly in emerging markets like China, India, and Mexico.

A great way to include water as part of your portfolio's commodity allocation is by buying an exchange-traded fund (ETF). An ETF is a basket of stocks that allow you to invest in a single asset class, sector, country, or theme with one stock. In one ETF, you'll own not only water utility companies but also related businesses, like those that help build the infrastructure for making water suitable for drinking. You won't have to pick a single stock, rather you can own the most important stocks in the water industry -- worldwide. ETFs are perfect building blocks for building a diversified portfolio using an asset allocation strategy.

If you are one of the investors out there watching General Motors stock each day trying to pick the perfect time to buy the stock... don't! For whatever reason, people have continued to buy General Motors stock, despite the fact that the company and the government have issued warnings that the stock is destined to be worthless.

I read an interesting article that reported yesterday there were 12.6 million shares of General Motors traded. Maybe people do not realize that the company went into bankruptcy, or maybe they are just trying to profit off of traders that are not aware that this is not new General Motors stock, but the volumes are a bit curious.

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.