Warren Buffett made his money like this. He's the most successful stock-investor in the world, and the second richest person (after Bill Gates).
Therefore there is strong argument for saying that he makes winners rather than buying them. And the first big winner that he made was a textile company that he bought because he realized it was perfectly positioned to sell insurance instead. The name of that company is Berkshire-Hathaway.
Buffett has another key advantage. Many of his profitable deals are not publicly available. For example look at the Goldman Sachs deal he did last year. He bought $5 billion in preferred stock that pays a perpetual 10%/year, with a 5 year option for $5 billion in stock at $115/share. They then were able to talk up his investment as a "vote of confidence", and he threw his weight into TARP.
If we assume a 5% discount rate, he spent $5 billion for $10 billion in future earnings, with a 5 year option that is potentially worth a lot more than that. That is worthwhile even if he only thought they had a 30-40% chance of surviving. It isn't hard to come out smelling like roses when opportunities like that get offered to you.
But Warren Buffet isn't really a stock investor (he is but thats not where he made his money). So if you're saying he's one of the stock investors playing musical chairs - I don't think you're correct.
Buffet buys "good companies" he invests in businesses more then stocks. If you're saying Buffet made his money by doing what this article said then I think you're right.. ;-)
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If you look at Berkshire Hathaway Holdings' balance sheet (1), you'll find their largest asset class is "Equity securities." Equity securities == stock.
Most other assets on the balance sheet are consolidated from subsidiary companies in which Berkshire... holds stock.
What most people don't realize is that buying stock is investing in the business.
1) Berkshire's 10Q: http://www.berkshirehathaway.com/qtrly/2ndqtr09.pdf
The other investment is lending, but I don't think you're suggesting that Buffet is primarily making money buying bonds, or getting even more involved with short-term loans.
I consider Buffet's traditional buy-and-hold strategy to be a different form of investing then those that tend to buy based solely on the expected performance of the stock price.