Faith, Doubt, and Warren Buffett

It's been a difficult year for the Warren Buffett faithful. Core beliefs are being tested.

Stock prices have plunged as the government struggles to contain the damage from what appears to be the worst financial and economic crisis since the Great Depression of the 1930s.

Berkshire Hathaway is no exception. In late November, the Class A shares traded as low as $74,100 each. That was over 51 percent below their December 2007 all-time intraday high of $151,650.

After a rebound that took the stock back into six-digit territory, it is once again trading below $100,000.

Berkshire's net earnings plunged 77 percent in the third quarter, as Buffett's long-term wager on the health of global stocks racked up billions in short-term paper losses.

Bloomberg reports that bets against Buffett, in the form of short selling of Berkshire stock, rose to a six-year high last month.

Reuters asks, Is Warren Buffett Losing His Touch? The Wall Street Journal urges him to "get a new crystal ball."

Even page views for this blog are slowing down a bit. (Maybe I just haven't been doing enough posts!)

Buffett isn't worried. "It's happened before," he tells Fox. "A capitalist systen overshoots .. but it works very well over time."

Almost two months ago, he told the world he's enthusiastically buying U.S. stocks for his own account, picking up a "slice of America's future at a marked-down price." But over those two months, the benchmark S&P 500 stock index has dropped another 8 percent.

Faith says that just as we know that winter won't last forever, we also know that stocks will eventually bloom again, too. Buy now while the nights are long and the storm rages, even if it is a "perfect" storm.

Doubt replies that this time, it's different. The financial markets don't move as reliably as the Sun and the Earth. Spring looks like it will be very, very late this time around. Things could get worse, and they will never be as good as they were.

For many Buffett followers, being "greedy when others are fearful" is a matter of faith, an acceptance of the idea that they should stay on the 'right' path despite all the nagging doubts that they're heading in the 'wrong' direction.