One big reason the Berkshire Hathaway (NYSE: BRK-B) annual meeting attracts 30,000-plus shareholders and fans is that anyone who stands in line has a shot at asking the master investor a question. Want to know why Buffett has never purchased shares of his good friend Bill Gates' company? Go ahead and ask him. Want to know what he thinks of the presidential candidates? He'll answer it.

Simple question, important lesson
This year, the most interesting Q&A concerned Berkshire's big purchase of PetroChina (NYSE: PTR) a while back. According to an article in Forbes, Buffett bought the shares after minimal due diligence. And I mean minimal. In fact, it was reported that all he did was read a couple of annual reports.

A shareholder stood to ask him -- and I'm paraphrasing here -- "Dude! What's the deal with that? How could you make such a large purchase with only the annual reports, without seeing the operations or meeting management?"

That's a fair question. How could Buffett, a man who has spoken at length many times about the vital importance of good management, buy a major chunk of this Chinese national company, sight unseen?

Stories are simple when the price is right
Buffett replied that the oil business is "not that hard to understand." So, once he came to the conclusion that PetroChina was worth about $100 billion but was selling for only $35 billion, the decision pretty much

In the period between 2004 and 2007, the Chinese stock market index rose more than 450%. On the streets of Shanghai I witnessed lines of Chinese citizens waiting outside brokerages to deposit funds so they could trade on the big stock market boom. The hyperbole surrounding the Great Chinese Miracle approached that of Japan, Inc., nearly two decades ago.

This was it -- missing out on China would be the greatest mistake investors of our generation could make.

You know what happened next, don't you?
In the past eight months, the Shanghai Stock Index has declined by nearly 50%. Speculators from Shanghai, Beijing, and all over China have seen their brokerage accounts get smoked.

It's a bit of a fortunate accident for foreign investors that shares trading on Chinese exchanges are largely limited to Chinese investors. Still, the whiff of opportunity a year ago has suddenly turned into the stench of decay. For people who are fundamentally opposed to overpaying for great investments, you couldn't ask for a better situation: Companies based in the world's most important growth economy are suddenly trading at a fraction of their former prices.

Wait, isn't the Chinese dream dead?
No.

But the market collapsed! Someone must know something!