If Warren Buffett told you that he loved Chinese small caps, would you bet against him?

Me neither.

So in the last two years, when Buffett made a massive billion-dollar wager and dropped some revealing pearls of wisdom at his annual meeting, I made sure to listen up. Similarly, you can be sure that I'm going to disclose both of Buffett's preferences and then show you how to invest alongside the Oracle of Omaha.

The bet heard 'round the world
When Buffett's Berkshire Hathaway (NYSE: BRK-B) (NYSE: BRK-A) announced last November that it would be purchasing Burlington Northern for $34 billion, it wasn't just a savvy investment or a bet on the railroad industry. Buffett exclaimed that his investment was an "all-in wager on the economic future of the United States."

This may be a difficult pill to swallow, considering the high unemployment rate and our massive federal deficit. It's also not easy to ignore the lure of emerging markets, especially when companies like Baidu and Petrobras have seen such amazing gains over the last several years. But if Warren Buffett decides to bet that much money on the economy of the U.S. -- well, guess what? I'm in, too.

Keep reading, and not only will I tell you why the U.S. is a great place to invest, but I'll also give you one stock that even Buffett would be sure to love.

America the beautiful
Compared to the rest of the world, American stocks are still pretty darn attractive.

According to data compiled by the iShares ETF center, the broad U.S. index is trading for a lower valuation than developed market peers such as Canada, Australia, and Germany, as well as emerging markets such as Brazil.

U.S. GDP is supposed to rise by 3.2% this year, and again in 2011. This is more than countries like Japan and Germany, and much greater than the rest of developed Europe. Not to mention that although the U.S. has problems of its own, we certainly aren't experiencing anything like the sovereign debt crisis that's sure to plague Europe for some time to come.

Smaller is better
Hopefully you agree with Buffett that the U.S. economy is worth investing in. However, we may not want to mimic his investing moves, because we all know that since Buffett runs a $170 billion company, he has to invest along certain guidelines. Berkshire is forced to watch the elephants of the investing world, which is partially why it holds ExxonMobil (NYSE: XOM), Coca-Cola (NYSE: KO), and Becton, Dickinson & Co. (NYSE: BDX). For investors who need income or stability in their portfolios, these are great U.S. stocks -- all three pay solid dividends, have low volatility, and can be counted on to endure the market's ups and downs.

But at an annual meeting in 2008, one of his shareholders asked him what he'd be doing if he only had a few million dollars to invest.

His answer: Most opportunities are likely in small stocks.

See, Buffett knows that finding small, well-run companies with a competitive advantage is beneficial because you can be sure there aren't a plethora of analysts combing through their financials and bidding up the stock of good companies.

Innophos Holdings (Nasdaq: IPHS) for example, is a $500 million company that specializes in phosphates that can be found in everything from cheese to laundry detergent. It's no surprise that only four analysts are covering it. It's boring, it's small, it's not international -- but trading at under 9 times forward earnings, this still looks like a steal even after last year's pop.

Smaller companies also have more room for growth, so the odds are in your favor for finding that next diamond in the rough. Sure, investing in blue chips is a safe move, but those companies are just too big to grow at an impressive pace. Buffett also knows that historically speaking, small-cap stocks have outperformed their large-cap brethren.

So just to summarize: The greatest investor of our time has told us that he is willing to bet billions of dollars on the future of the U.S. economy, and that he thinks most of the opportunities are in small-cap stocks.

Fortunately, we don't have to limit ourselves to large stocks -- that's Buffett's problem, not ours! As individual investors, we can use old-school Graham and Buffett techniques -- reading 10-K's, digging through company reports, studying financial statements -- to find that small, undervalued company that no one else has found. That's what our analysts do at Motley Fool Hidden Gems; they look for rarely covered companies with tons of potential, and they dig and dig and dig until they find one that's a definite "buy."

One stock Buffett would be sure to love
Recently the team unearthed AZZ (NYSE: AZZ), a $440 million company based out of Fort Worth, Texas, that provides electrical equipment for power distribution and generation. It offers infrastructure improvement for power transmission, bridges and highways, and all municipal and public services. By some expert estimates, it could take $1.5 trillion to upgrade our electrical infrastructure just to meet today's demands. And did I mention that AZZ only has four analysts covering it? So it's a barely covered U.S. company, plus it's also an indirect bet that U.S. infrastructure will need to keep pace with a growing future economy. Sounds awfully like Buffett's thesis mentioned above.

Hidden Gems knows how to put its money where its mouth is; the team recently bought shares of AZZ for its real-money portfolio. If you'd like to see what other small caps they're buying, in addition to their lengthy analysis about AZZ, you can get a 30-day free, all-access pass. Just click here to get started.

Fool contributor Jordan DiPietro owns no shares of the stocks above. Berkshire Hathaway and Coca-Cola are Motley Fool Inside Value recommendations. Baidu is a Motley Fool Rule Breakers selection. Berkshire Hathaway is a Motley Fool Stock Advisor pick. Coca-Cola and Petroleo Brasileiro are Motley Fool Income Investor recommendations. The Fool owns shares of AZZ incorporated, Coke, Berkshire Hathaway, and Innophos Holdings. The Fool's disclosure policy thinks the smaller, the better.