In his defense, Buffett remarks, ''There are very few people who would want to buy something that was totally unmarketable for such a long period of time. For most people, it just wouldn't be a practical investment.'' In addition, he says, ''If I had four more Coca-Colas to buy, I wouldn't be buying these. I like the convertibles better than I do other fixed-income investments, but I'm not doing handsprings. We get a mediocre return.'' ''Mediocre'' for Warren Buffett, that is. William H. Miller 3d, a senior vice president with the Baltimore investment firm of Legg Mason, observes: ''If people object that he got a special deal, those are objections that should be against the management of those companies, not Buffett.''

Last year, in another departure from past practice, Berkshire raised $400 million from a sale of zero-coupon convertible bonds. Holders receive no interest payments, but they will eventually have the option of converting the bonds into cash or common stock. Thanks to a provision of the tax code, Berkshire deducts interest payments on these bonds, even though such payments are not being made, and most likely never will be. As a result, Berkshire's carrying costs are only about 4 percent.

Meanwhile, the holders of the bonds declare interest they never receive. ''There is a very curious market for this kind of zero-coupon bond,'' says Columbia's Louis Lowenstein. ''It only makes sense for people who care about reported income rather than real income, which gives it an appeal for institutional investors who are judged on a performance that isn't necessarily based on cash.''

Though Berkshire has grown and profited hugely under Buffett's custodianship, it has not declared a dividend since 1967. Nor has he ever split the stock, although the price has risen astronomically. As recently as 1982, the stock traded as low as $420; in 1988, when Buffett listed Berkshire with the New York Stock Exchange, the shares soared as high as $8,900 before falling back to trade in a range between $7,200 and $8,500. Berkshire remains the most expensive stock on the exchange, though it has recently come under pressure following a Feb. 12 article in Barron's. An analysis in the financial weekly concluded that Berkshire's market price was ''considerably higher than the company's value when viewed as a collection of business and portfolio investments.'' (Buffett claims that the article contained serious computational errors that reduced the book value of Berkshire's holdings by hundreds of millions of dollars.) The annual reports he personally composes are remarkable for their wit and candor and are liberally laced with apposite quotations from the likes of Pascal, Goethe, Sam Goldwyn and Yogi Berra. Sometimes a note of pessimism creeps in. ''Our gain in net worth during the year was $613.6 million, or 48.2 percent,'' he wrote in his 1985 report. ''It is fitting that the visit of Halley's Comet coincided with this percentage gain; neither will be seen again in my lifetime.'' Perhaps, but the comet's trail was sighted last year, when Berkshire posted an annual gain of $1.51 billion, or 44.4 percent.

WARREN BUFFETT HAS never regretted his return to Omaha. His older son, a farmer and county commissioner, lives outside town, and Buffett's daughter has recently returned to Omaha from Washington. Her husband manages the Buffett Foundation, devoted to population control and nuclear disarmament; the foundation will receive by far the largest portion of Buffett's personal fortune. His second son is a musician in Milwaukee. Buffett is separated from his wife, who resides in San Francisco; he lives with his companion and housekeeper, Astrid Menks.

''I think it's a saner existence here,'' he says. ''I used to feel, when I worked back in New York, that there were more stimuli just hitting me all the time, and if you've got the normal amount of adrenaline, you start responding to them. It may lead to crazy behavior after a while. It's much easier to think here.''

As Buffett reflects on his life, his rapid, hesitant voice is punctuated with bursts of laughter. ''I love what I do,'' he says. ''I'm involved in a kind of intellectually interesting game that isn't too tough to win, and Berkshire Hathaway is my canvas. I don't try to jump over seven-foot bars; I look around for one-foot bars that I can step over. I work with sensational people, and I do what I want in life. Why shouldn't I? If I'm not in a position to do what I want, who the hell is?''