What a difference a couple of weeks make.

That thought must be on the mind of billionaire investor

Warren Buffett

as he welcomes over 10,000 shareholders to Omaha for this weekend's "Capitalist Woodstock" --

Berkshire Hathaway's

(BRK.A) - Get Report

annual meeting. The yearly pilgrimage to this Midwestern Mecca to partake in the wit and wisdom of Berkshire's chairman and his straight man, Vice Chairman Charlie Munger, claims to be the nation's largest annual gathering of shareholders. The faithful converge from all 50 states and nearly a score of foreign countries to seek counsel and solace from one of history's most celebrated stock pickers.

Until two weeks ago it seemed there would be little to celebrate come Saturday in Omaha. In the past year, critics have suggested that Buffett has gone from investment sage to stooge, due in large part to his obsession with Old Economy stocks and steadfast avoidance of technology. Highflying New Economy stocks left Buffett and Berkshire in a trail of silicon dust and many investors wondering if Berkshire would ever recover and if Buffet could ever regain his luster. Even Buffett, in his typically candid discourse, gave himself failing marks in his recent letter to shareholders. "We had the worst absolute performance of my tenure and, compared to the

S&P

500, the worst relative performance as well," he wrote. "

My grade for 1999 most assuredly was a D."

How bad was it? While the S&P 500 gained more than 20% and the

Nasdaq Composite

soared nearly 80% last year, Berkshire lost nearly 20% of its value. And, while the Nasdaq comparison may not be entirely fair, it does offer a stark contrast between the New Economy investor and the Old Economy -- value bent embodied in Buffett.

What Have You Done for Me Lately?

But, as volatility crept into the market, investors began to question the sustainability of the parabolic rise in technology prices, and economic data suggested the

Fed

would remain ever-vigilant in its battle against excessive growth. Value strategies came back in vogue and Buffett caught a big break. On April 14, the Nasdaq experienced its largest point decline and, for the first time in almost a year, Berkshire was again outperfoming both the S&P 500 and Nasdaq in a year-to-date comparison.

Berkshire Hathaway Comes Back

That, say Buffett observers, likely saved him some embarrassment and no doubt changed the tone likely to emerge at Saturday's annual meeting where Buffett and Munger will answer questions from shareholders -- nearly non-stop -- for seven hours. "Its amazing that in less than 30 days the mood has shifted from a likely Buffett 'mea culpa' to validation of his theory and even the tacit, yet powerful, 'I told you so'," says Ted Bridges, long-time Buffett watcher and principal of Omaha's

Bridges Investment Counsel,

which has a long position in Berkshire.

Despite the recent gains, however, this is still the first time since Buffett bought Berkshire that the stock has underperformed the averages -- in this case both the S&P 500 and the Nasdaq -- for a three-year period. "There was a time when no one could ever conceive of that happening," says Bridges.

And that will prompt other shareholders to question his tactics. "There is a group of shareholders that are getting smarter, more articulate, and analytical," says Robert Hagstrom, portfolio manager of the

LeggMason Focus Trust

and author of

The Warren Buffett Portfolio

. "They may ask the fundamental question, not just how can Buffett keep pace with the market, but how can he beat the market consistently without endorsing and looking for opportunities in the New Economy. That's a very fair question."

Hit Me With Your Best Shot

In the past, Buffett has seemed to revel in the annual banter with shareholders, answering the questions he likes, sidestepping others and stubbornly refusing to answer most questions about specific investment activity of Berkshire. "

We will discuss our activities in marketable securities only to extent legally required," Buffett wrote in the Berkshire

Shareholders Manual

. "Good investment ideas are rare, valuable and subject to appropriation. Therefore we normally will not talk about our investment ideas."

Still, shareholders ask. And, on occasion, Buffett breaks policy with some candor much to the surprise and delight of his captive audience.

Many of the questions are recycled year after year. "I'd say that a great deal of the meeting is pretty predictable," quips Hagstrom. However, there are a number of topics that may add spice to this year's Omaha love fest:

Notably absent from Buffett's annual letter to shareholders was any mention of

Disney

(DIS) - Get Report

among Berkshire's top holdings with year-end market values of $750 million or more. The omission does not mean Buffett sold his entire position, but it does mean he sold at least 25 million shares of the entertainment giant in the past year. Still, Disney remains an exhibitor at the annual meeting, so shareholders will likely be curious about the continuing relationship between Buffett and

Michael Eisner

.

Berkshire's purchase of a controlling economic interest in

MidAmerican Energy

(MEC) - Get Report

is likely to raise questions, especially given Buffett's comment that he may seek even more power investments, and if he does, "the amounts involved could be large."

Buffett recently revealed a stake in a

Microsoft

(MSFT) - Get Report

convertible security. That could prompt some questions about Buffett's relationship with

Bill Gates

and whether his close friendship with Microsoft's chairman will ever persuade him to invest in the New Economy.

Buffett's performance, both recent and future, likely will be the subject of much discussion. Those shareholders who have lost value in Berkshire holdings may take a more self-serving approach to those questions. "It's fair to ask Buffett what broad-based strategies he thinks will beat the market going forward," says Hagstrom. "If he can answer that, Berkshire remains a core holding. If he can't, many shareholders are likely to think hard about the future." And -- absent technology -- the answer appears especially difficult.

Buffett is also likely to face questions about his recent dip into REITs, his views on the markets and what succession plans are in place should he ever decide to close his Value Line notebook for the last time.

Around lunchtime, Buffett and Munger are bound to get the question with the longest tenure at the annual meeting: "Read any good books lately?" An always prepared Charlie Munger delivers a list that could keep investors busy through next May.

Don't forget to join us on the message boards to weigh in with your thoughts. And, on Tuesday, join me and Robert Hagstrom on Yahoo! for a chat about Buffett, Berkshire and the annual Capitalist Woodstock.

Next: A visit with a group of long-term Berkshire shareholders about their experiences, their expectations of the annual meeting and their thoughts about Buffett and his recent market struggles.

Christopher S. Edmonds is president of Resource Dynamics, a private financial consulting firm based in Atlanta. At time of publication, Edmonds had no positions in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While Edmonds cannot provide investment advice or recommendations, he welcomes your feedback at

invest@cjnetworks.com .