TRADING PLACES\Investor surpasses Bill Gates as richest person in the world.

Byline: Sonia Reyes New York Daily News 

Finally, there's someone even richer than Bill Gates.

Warren Buffett, the 65-year-old CEO of conglomerate Berkshire Hathaway and one of the country's shrewdest stock pickers, has topped Microsoft founder Bill Gates as the richest person in the world now that his Berkshire stock has soared to $17 billion.

Buffett, who is known for snapping up companies at bargain prices and making mountains of money from them, bought Berkshire in 1965 when it was trading at just $20.

Today, the company - whose wide-ranging holdings include an insurance firm, a chain of jewelry stores and major stakes in such blue-chip stocks as Coca-Cola - is the most expensive U.S. stock at $35,500 a share and Buffett owns more than 400,000 shares.

Buffett's fortune has gotten a big boost thanks to the raging stock market. In the last year, Berkshire stock has soared more than 60 percent.

Just a year ago, the Forbes magazine 400 roster had Buffett with a $10 billion fortune and Gates, as the richest man in the world, with a net worth of $12.9 billion. But the Microsoft holdings of Gates, 40, haven't kept pace with Berkshire.

A proxy statement filed with the SEC last week disclosed that Buffett owned 479,202 Berkshire shares at the end of 1995, the same as the previous year. Based on Thursday's closing price, those shares are now worth more than $17 billion. As for Gates, his 29.3 percent Microsoft stake - or 141.2 million shares - are worth $13.9 billion.

There's certainly no competition raging between Gates and Buffett. Both have been friends for years and they have sometimes spent weekends together chatting about stocks.

Buffett's genius is in spotting opportunities to buy stocks in companies whose underlying assets are worth much more than the price of the stock, experts said.

But what really makes Buffett a favorite of investors and shareholders is his modest ways. He draws just $100,000 a year in salary - relatively low for a corporate chief - and hasn't given himself a raise since 1981.

Instead of raking in millions in pay and perks, most of his net worth is in Berkshire stock, which gives him a big incentive to see the price rise.

"He's a real saint for his shareholders. He takes so little money," said Graef Crystal, a leading executive compensation expert.

Crystal said that given the size and performance of Buffett's company the chairman's pay package should be more like $4.2 million. "But that's why he's such a genius," said Crystal. "He takes his profits and dividends and reinvests them for the long haul with his well-known patience."

Buffett's immense wealth belies his humble roots in America's heartland.

Born in Omaha, he studied at the Columbia Business School under legendary professor Benjamin Graham, who taught him to make investing decisions based on a careful study of financial statements.

At 25, he founded Buffett Partnership, Ltd. with $100,000. The assets grew quickly and in 1965 he made the fateful decision to buy Berkshire Hathaway, then a textile company.

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Photo (Color) Warren Buffet, CEO of conglomerate Berkshire Hathaway, has seen recent market activity push the value of his stock holdings to $17 billion. Associated Press