Warren Buffett is arguably the best investor of the century, having built the biggest non-technology company on Wall Street . . . $720 billion and counting . . . out of a combination of portfolio performance and old-fashioned captive profits from the operating companies he’s bought over the years.

What’s remarkable about his latest set of quarterly results is how poorly the investments have been doing and how vibrant the operating companies are. That tells us everything we need to know about the economy right now.

And Buffett’s response to current conditions tells us everything we need to know as investors. If we want to follow in the footprints of the Sage, we need to be ready to become net buyers of stocks in moments when the portfolio is underwater and others are liquidating everything they can sell.

Buffett put $3.8 billion to work last quarter. Only $1 billion of that went to buying back his own stock. The rest was invested in other companies that he just couldn’t resist while the market was spiraling into bear market territory.

Admittedly, that was a slowdown from the $42 billion he spent in the first quarter . . . but either way, it’s a demonstration of confidence. Buffett knows stocks will recover. He’s been doing this long enough to see the cycle as it unfolds.

In the meantime, it’s good to own a business . . . and not so great lately to be an investor. That’s the economy we find ourselves in right now.

Buffett booked $2.4 billion more profit on his captive businesses last quarter than anyone expected. The bottom line is up closer to 40% year over year. Huge.

People are buying candy. They’re buying underwear. They’re insuring their cars. And that business is more profitable than ever.

Operating revenue only climbed 10% in this period. Warren booked roughly a 34% margin on that additional business . . . healthy numbers by almost any standard, as long as they last.

The problem was on the investment side. Warren took a $66 billion loss on his portfolio, which wiped out all the progress his companies reported on the business side.

The companies are doing better. The stocks did worse. Stocks can rise and fall but sooner or later if the companies behind them are moving in the right direction, the stocks will follow.

That’s why Warren is a net buyer right now. I can’t blame him.