BEIJING. Sept. 25 (Xinhuanet) -- Savvy billionaire Warren Buffett has made a surprising move -- investing 5 billion dollars in Goldman Sachs, Wall Street's most prestigious bank Wednesday.

    Buffett practiced his legendary buy-on-the-cheap strategy when fear was high and the share price was low. His purchase came when Goldman 's stock was almost 55 percent below its 52-week high of 250.70 dollars.

    He grabbed a big stake in a firm considered best in its class and harvested a 10 percent dividend to reduce risk.

    The deal, a Buffett vintage, is outrageously risk-ridden, but the turbulence and fragility of financial markets may prove Buffett is getting a pretty good chance of making money.

    "It's a very savvy strike by Buffett into a very panic-stricken marketplace," says Jeff Matthews, a hedge fund manager, blogger and author of an upcoming book, "Pilgrimage to Warren Buffett's Omaha." "He's not buying any bad debt. He is buying a very secure ownership in Goldman Sachs."

    "Buffett is basically betting that the financial system does not collapse," says Michael Holland, a New York-based money manager.

    In a statement, Buffett hailed Goldman's "global franchise and deep management team."  Shortly after the buying, Goldman shares rose 7.95 dollars Wednesday to 133, meaning Buffett is already up 18 dollars a share.

    The Goldman shares deal arrived amid one of the worst financial crises on Wall Street since the Great Depression of the 30s. It followed a full-day of contentious debate on Capitol Hill over the fate of the government's 700 billion dollar Wall Street bailout plan and the  bankruptcy protection filing of Lehman Bros., the bailout of insurer AIG and the government takeover of the nation's two mortgage giants.

    Given the timing of the move and Buffett's stature, it most directly demonstrates his confidence in the financial system, which just last week seemed to be on the brink of collapse.

    "The mere fact that the world's greatest investor is willing to back a company like Goldman at this time signals confidence," says Vahan Janjigian, chief investment strategist at Forbes and author of "Even Buffett Isn't Perfect."

    This is Buffett's second major buying in a Wall Street bank. In 1987, he invested 700 million dollars in Salomon Bros. and had to rescue it at the end by by being its interim chairman in August 1991. He stepped down in 1992 and five years later sold his stake for a profit to the now Citigroup.

    (agencies)