We all know the maxim to buy when there's blood in the streets. But who's doing the buying? Why, it's none other than Warren E. Buffett. You didn't think he was going to sit on that pile of cash forever, did you?

The Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B) chairman has long expressed an eagerness to sink his money into regulated utilities. That's why Berkshire bought a 75% stake in MidAmerican Energy Holdings back in 1999. Now MidAmerican, in turn, is picking up Constellation Energy Group (NYSE:CEG) for $26.50 a share. 

In his most recent letter to shareholders, Buffett detailed MidAmerican's astonishing ascent since Berkshire bought its stake. Earnings grew from $2.59 per share back then to more than $15 in 2007. MidAmerican has grown primarily through acquisitions of large businesses with stable earning power.

But stability is the antithesis of what we've seen at Constellation. August jitters broke into an all-out jostle for the exits on Wednesday, as the utility's investment-grade credit rating appeared to hang by a thread. The company released a statement yesterday stating, in effect, that everything was fine but also noting that it was seeking strategic alternatives. Not exactly reassuring.

Fortunately for Constellation, Buffett and MidAmerican chief David Sokol were just a phone call away, and a deal was cut with typical Omaha-style expediency. MidAmerican gets Constellation for less than five times the midpoint of the latter's 2008 earnings guidance, reiterated just yesterday.

This is a dynamite deal for MidAmerican. Constellation is looking to sell off its exploration-and-production business, just as Dominion (NYSE:D) shipped off most of its onshore natural-gas assets to XTO Energy (NYSE:XTO), Loews (NYSE:L), and Linn Energy (NASDAQ:LINE) last year. That leaves a top electric generation and distribution business, including some choice nuclear assets. This discount entry into the nuclear business may be the most promising part of the purchase.

I hope you've been more patient than yours truly and kept some powder dry. If you see something selling for far below intrinsic value, follow Buffett's lead -- now is the time to buy.