Pablo Picasso famously told people who interviewed him that people didn't buy his paintings. What they were actually buying was his signature. This was true: What would the same piece of art be worth had Picasso not signed it? It's not like he had a great signature or anything, but when he affixed it to one of his paintings, it validated the piece, authenticated it.

So prized was Picasso's signature that it is said that when he paid for things by personal check, the odds were that the recipient of the check would save it rather than cash it. Seeing as a simple Picasso autograph can easily fetch $1,000 today, perhaps this wasn't such an irrational decision.

What I like about this concept though was the attachment of additional value simply by Mr. Picasso's placement of his imprimatur, and since these were negotiable instruments, it means that a recipient placed a higher value on holding on to the check than cashing it. The value came not from any intrinsic source -- it's a fraction of a cent's worth of ink on a piece of paper worth scantly more. Anything touched by Picasso becomes in the eyes of many that much more valuable. It was something that he could have used (and perhaps did use) to his advantage. Why not keep paying with checks if people aren't going to cash them?

There is, and was, a risk for the recipients who treasured the check more than the funds due them. Picasso could have been found to be a fraud, or he could have faded into obscurity, or he might have been implicated in some bizarre artist doping scandal that tarnished his legacy forever. He could have been Michael Jordan in life, Chris Washburn in the hereafter. (Who is Chris Washburn, you ask? Exactly my point.)

Buy what Warren buys

There are certain investors who are also granted the modern-day version of a "Picasso check." Most notably, and perhaps most obvious, is Warren Buffett, chairman of Berkshire Hathaway (NYSE:BRKa) . Last year, when he disclosed in a public filing that he had taken a stake in Chinese oil giant PetroChina (NYSE:PTR) , the share price of the company and its trading volume surged. Was there any value that Buffett added to PetroChina? None really, and yet the disclosure of his willingness to buy more than 13% of the company's traded equity stoked an interest in the U.S. for PetroChina shares that has not abated. Before Buffett took his position, it was exceedingly rare for PetroChina to trade more than 100,000 shares a day, with the daily volume averaging about 30,000. Afterward, not only did the shares immediately rocket upward in price but also average volumes have remained about 10 times as high.

The sharp rise in interest and price can only be due to one thing: Buffett's "signature" on PetroChina. Sure, China's been an investment fad over the last year or so, and oil has obviously run amok, so the combination has obviously helped to maintain the interest in PetroChina -- an interest that is now at least matched by its domestic brethren, CNOOC (NYSE:CEO) . But the impetus of the original launch of PetroChina's interest as an investment in the states is unmistakably tied to Buffett's disclosure of ownership. You could almost hear the collective rationalization of the masses: "If it's good enough for Warren, it's good enough for me."

It can go badly. Folks who piled into Level 3 (NASDAQ:LVLT) stock when they heard that three Picassos -- Buffett, Bill Miller of Legg Mason Value Trust (FUND:LMVFX) , and Mason Hawkins of Longleaf Partners (FUND:LLPFX) -- had purchased its convertible bonds pushed the stock up nearly 100% in the short term to above $7.00 per share. Imagine these investors' shock -- many of whom didn't know telephonic fiber from dietary fiber -- when they found out not long thereafter that Buffett had not only converted his bonds into stock, but sold that, too.

Who else is a Picasso? Well, Peter Lynch, for one. There was a story in The Wall Street Journal in October cataloguing the losses scores of investors took after following Lynch into a tiny company called SafeScripts, which now trades at a penny per share. What did most of them know about SafeScripts? Well, they knew that Lynch had bought a big slug of it and that he's made millions finding companies like this.

Eddie Lampert is a new Picasso, with folks having piled into companies such as Kmart (NASDAQ:KMRT) and AutoZone (NYSE:AZO) following his fund's taking a big stake in each. Marty Whitman's one; so is David Dreman. So are George Soros, Jim Rogers, Ralph Wanger, and Cumming and Steinberg at Leucadia (NYSE:LUK) . The very fact that such folks have bought into one company or another is enough to attract other investors to those same companies.

Were there perfect information in the market, it probably wouldn't be a bad way to invest. Of course, as the Level 3 example above shows, the information train doesn't work that way. You often find out several months later what these investors have done when they file their 10-Qs, and many, including Buffett, have actively lobbied for dispensation from the SEC to keep from disclosing certain positions, a dispensation that the SEC has been increasingly loath to give.

The problem is that, as Lynch has famously said, he would be very happy if 60% of his ideas turned out to be winners. That's where the Picasso thing breaks down. Ol' Pablo could have rubbed his underarm on something, signed it, and had it increase in value. In investing, there is no such certainty, and for the most part these investing Picassos aren't particularly eager to have people follow them blindly. A company may go up in price simply because it has been disclosed that Bill Miller bought a big position in it, but Miller's endorsement is neither permanent nor additive of value. Should he change his mind and sell, your only reason for holding a company in the first place may have slipped out the back door unnoticed.

There are other ways to take advantage of the genius of the investing Picassos. You could, as Bill Mann has done, buy shares in Berkshire Hathaway, or you could seek out one of their funds. Our own Shannon Zimmerman has a monthly newsletter that helps investors separate the mutual fund wheat from the chaff. Take a free trial of Motley Fool Champion Funds to get the list of funds that Shannon has recommended to his readers. Bill Mann holds no other company mentioned in this article. Fool rules are here.