I recently had a chance to talk with Warren Buffett biographer Alice Schroeder, author of The Snowball: Warren Buffett and the Business of Life. So what are investors getting wrong when it comes to understanding the Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) CEO? In this second of five installments, Schroeder talks about the underrated, the overrated, and the misappropriated.

Mac: What is the most misappropriated piece of Warren Buffett wisdom -- a quote that just gets under your skin when people use it?

Alice:  I am going to say, "Be fearful when others are greedy; be greedy when others are fearful." I have heard that used as an excuse to invest in cheap stocks that people are fleeing from, like BP (NYSE: BP), without doing the work. And in fact, I think it led some value investors to make some serious mistakes during the financial crisis when they looked at financial stocks that had been battered, like AIG (NYSE: AIG) or like Fannie/Freddie and thought, well, everyone's fearful and just clicked buy -- I'll be greedy. And "be fearful when others are greedy" doesn't mean be lazy.

Mac: And what is the most underrated thing about Warren Buffett's success?

Alice: How hard he worked -- because he tends to make it look effortless in public and it wasn't at all. It is, to some extent, the way that you do it. The rules that he uses are simple. People have mistaken that for the fact that it might be easy. I have never seen anybody who has put more effort into investing than Warren Buffett, over the course of a lifetime.

Mac: What is the most overrated thing about Warren Buffett's success?

Alice: That it was done through stock picking. It wasn't all done through stock picking. So much of it was done through choosing companies and businesses to buy and then striking favorable deals that were negotiated on terms because he had built up advantages through relationships with people or through being somewhat predatory. So thinking of him in a room, flipping through the Wall Street Journal picking stocks, that is not where most of the money came from.

In our first installment, Alice talked about whether Buffett would buy BP. In our next article, Alice talks about Buffett's bad company and his definition of success.

Mac Greer doesn't own any of the stocks discussed. Berkshire Hathaway is a Stock Advisor recommendation and an Inside Value recommendation. The Fool owns shares of Berkshire Hathaway. The Motley Fool has a disclosure policy that is neither underrated nor overrated.