OK, Bash Buffett -- but Buy His Stock

I come not to bury Warren Buffett but to praise him.

In the last week or so, two other financial pundits, Jon Markman on this site and James B. Stewart in The Wall Street Journal, have argued that Buffett has lost it.

Once Buffett was a CEO worth investing beside, Markman wrote, but now he should be stripped of his title as Oracle of Omaha and called the Natterer of Nebraska. Stewart called Buffett's annual letter to Berkshire Hathaway(BRK.B) autumnal and added that he couldn't help wondering if Buffett had lost some of his legendary touch.

I'm sure Buffett has been called things far worse than "natterer" in his long career. And he really doesn't need any defense from me. The columns, however, do deserve a rejoinder, because I think both articles are so profoundly beside the point that they might cost investors a few bucks or more.

Deciding whether Buffett is the greatest living investor may be an interesting parlor game, but it has nothing to do with whether or not you should own Berkshire Hathaway stock right now.

As always with a stock, it's not how the stock has done in the past that counts, but how it's likely to perform in the future. Yes, Berkshire Hathaway's performance in 2004 (a 4.3% return) and 2005 (flat for the year) was pretty lame. But I think you want to own Berkshire Hathaway now, precisely because 2004 and 2005 have positioned the shares very nicely for solid profits in 2006.

One of the first things you learn in financial pundit correspondence courses is that the stock market will do everything it can to embarrass and humiliate you. So I wasn't surprised to see Wall Street upgrade shares of Anheuser-Busch(BUD) just as Stewart's piece citing Buffett's purchase of the shares as an example of his fading prowess as a stock-picker came out. Deutsche Bank(DB) even called the stock a buy and put a $49 price target on the shares -- a potential 13% gain.