Everyone Loves Warren Buffett, But Should We?

NEW YORK (TheStreet) -- Everyone loves Warren Buffett.

The avuncular CEO of Berkshire Hathaway (BRK.A) is the gold standard of American investing. Buffett is the investor millions of investors want to be like.

His annual meeting is an investor's Woodstock, his annual letter to shareholders celebrated like a Springsteen album drop.

But this year is a little different. This year the hype is starting early. This year he's teasing his letter to a national magazine.

And this year it's not working.

So far in 2014 the S&P 500 is basically flat, the Nasdaq is up nearly 3%, and Berkshire-Hathaway is down 4.4%.

Has the "Sage of Omaha" lost his touch?

Over the last quarter Berkshire added to positions in Exxon Mobil (XOM), US Bancorp (USB) and DaVita Health Partners (DVA). All have been winners. Over the last six months the first two are up about 10%, and the last is up over 20%.

But, as even Buffett admits, liquidity can be a curse as well as a blessing. Having a big piece of cash to invest can make the investor a frenetic stock picker. Better to stay with what you know and buy a low-cost, broadly-based mutual fund which tracks the S&P 500, he suggests.

Doing that would have given you a 10-year return of about 61.5%. You would have lost half your stake during the crash that began in 2007 and climaxed in early 2009, but since then the index has nearly tripled in value. Patience is the lesson, your patience will be rewarded.

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