Warren Buffett is definitely not the guy I thought he was.

For a guy who claims his first rule of investing is "Never lose money," Warren Buffett doesn't appear to have much of a problem with it.

In fact, like many of my favorite people, the guy is full of contradictions. He says "don't lose money"; he frequently does. He says derivatives are "financial weapons of mass destruction"; he invests in them all the time.

Regardless of his conservative label, Buffett is a classic big-risk, big-reward Rule Breaker investor. Deep down inside, he definitely knows it.

Rebel with a cause
The Oracle of Omaha has lost more money than I could ever dream of making. But rather than being a loss-averse maniac, Buffett realizes that investors must lose money. It's just part of the game. To strike it really big, higher-risk, higher-reward stuff simply has to have a seat at the table.

Buffett knows this. That is why I'm nominating him as the ultimate Rule Breaker.

How legends are made
Risk is just a natural reality of life. Losing money is no different. Buffett doesn't avoid risk. He treasures it and he manipulates it. It's the only way he gets such great deals.

Long ago, Buffett bought a cash-guzzling textile mill called Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B) at a time when American textiles were going right down the tubes. The decision was roundly considered a disaster. Years later, he (unsuccessfully) invested his way through the majorly debt-laden US Airways (NYSE:LCC), which was, even then, a questionable decision. More recently, he took on a massive investment in Conoco-Phillips (NYSE:COP) to indirectly speculate on rising gasoline prices near the very peak of their epic run of 2008. This, too, ended not so well.

You see, Buffett has never been afraid to bet big. Buffett takes chances.

The big bets of 2009
At the very peak of a global financial panic, Buffett infused billions into Goldman Sachs (NYSE:GS) and General Electric (NYSE:GE). Though it was widely noted that he received great terms on the deal, he was under no obligation to needlessly risk his cash hoard at a time of such utter chaos -- unless he wanted to, of course.

One month ago, Buffett made a $44 billion all-out wager on railroad giant Burlington Northern (NYSE:BNI). A defensive bet, maybe. But in doing so, he has bet the farm on the economic future of the United States at a time when many folks are seriously questioning its long-term viability.

Never lose money? Psssshh. Buffett says bring it on.

A pattern emerges
This is a man who is completely ready to lose money -- under the right circumstances, of course.

He seems every bit as terrified of missing out as he is of taking hits on the downside. If all he wanted to do was preserve capital, I can think of a few things he'd be doing differently. On the contrary, he intends to continue compounding it -- the same way he has for decades -- well into the foreseeable future.

He's a lot different than you or I.

Whereas we are governed by the emotion and pain associated with risk and its negative consequences, Buffett is primarily governed by probability and outcome. If the chance to win big is reasonably evident, Buffett will step in when no one else has the nerve. That's why he's different. And that's why he's the ultimate Rule Breaker.

What he sees
It seems easy to suggest, but being the ultimate Rule Breaker is not simply about taking big risks. It's about recognizing the inherent simplicity involved. Mathematically speaking, losing 15%, 20%, or 40% on any number of stocks is trivial, if you're able to balance it out with the occasional stock that rises by 300%, 500% or 1,000%. Think about it.

I'm not saying Buffett mindlessly throws away his money and places his chips on randomly selected stocks. The guy certainly does not haphazardly speculate. What I am saying is that Buffett will take calculated risks, sometimes very substantial ones, if the associated payoff is large enough and if its outcome is reasonable enough. He's not afraid.

Today, he's doing precisely that by wagering $230 million on an obscure electric-car maker in China, of all places. It would seem that he's developed quite the appetite for measured risk.

The Foolish bottom line
If you want to approach similar success, you have to be willing to take appropriate risks as well. But the risks have to be smart, they have to be well-reasoned, and the potential for a big payday has to be big enough to justify taking that risk. Otherwise, you should forget it.

If you're looking for higher-reward stocks and you want a few ideas to help you get started, click here for a free trial of the Rule Breakers investment service, where higher-reward stocks abound.

Fool Nick Kapur owns no securities mentioned above and would like to see Buffett break some more rules. Berkshire Hathaway is both a Stock Advisor and Inside Value selection, as well as a Motley Fool holding. The Fool has a disclosure policy.