Every investor knows that the old adage, "Buy low and sell high," is good investment advice, but the devil is in the details: How does an investor know when to jump in as the pendulum swings from one side to the other?

Having that intuition is doubtless what separates the greatest investors from the rest, and two of these savvy characters, Warren Buffett and Allan Mecham, used their innate knowledge to make sizable investments in Bank of America (NYSE:BAC) when the big bank was in dire straits -- and both are still reaping the rewards.

A young man with a nose for investing
Mecham, barely 35 years old, heads up the privately held Arlington Value Management, a fund located in Salt Lake City that returned 36% last year. Nicknamed "The 400% Man," because of his fund's superior returns, Mecham made his name by investing in U.S. companies -- often during a low ebb in their business cycle. Betting on good times bringing home great profits has certainly proved to be a lucrative strategy for him.

And so it was with Bank of America. When the stock tanked toward the end of 2011, Mecham went on a buying spree. B of A stock comprised 18% of his fund's assets at the close of 2012, and that purchase has no doubt helped his company attain its lofty returns since then.

Not surprisingly, Mecham is also a fan of Warren Buffett, and that same year, he ramped up the fund's position in Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B) to approximately 50% of the fund's holdings.

Buffet loves the big banks
Buffett's affection for the biggest banks, particularly Wells Fargo (NYSE:WFC), is legendary. He consistently edges up his stake in the venerable old bank and made another big purchase in the second half of 2012, thus making the stock Berkshire's second largest investment. The bank's mortgage-origination production line has brought in profits that prove the shrewdness of Buffett's investment instincts.

When the Oracle invested $5 billion in Bank of America during the dark days of 2011, he not only helped bolster confidence in the big bank, but helped his own company, as well. His preferred shares pay him a juicy 6%, and his additional options to purchase shares at a little over $7 in the future are valuable indeed. This transaction mirrors another he made with Goldman Sachs (NYSE:GS) in 2008, when he made a similar $5 billion infusion into that struggling firm. That outlay is now translating into a nice long-term investment in Goldman, without Berkshire having to invest another penny.

A takeaway for everyday investors
Of course, most investors don't have the wherewithal to make the grandiose type of investments that Mecham and Buffett transact. But this story lends much weight to one of Buffett's famous investment credos, "Be fearful when others are greedy, and greedy when others are fearful." And that's a lesson that any investor, no matter how small, can take to the bank.