By scholastic measures, Buffett is lagging the competition in the last decade. Should you continue to believe in the Oracle's premium?

Disclosure: My Berkshire Hathaway purchase in last August and November only appreciated 1.1% so far. The stock is even more range-bound than MSFT. :-)

Over the past half decade, Berkshire's stock has beaten the Standard & Poor's 500-stock index by three percentage points a year. That's nice, but not necessarily worth flying to Omaha for. In aggregate the 33 largest holdings in its $44 billion U.S. equity portfolio -- ranging from American Express to Wells Fargo -- have underperformed the stock market over the past 12 months.

Moreover, if one uses some of the more sophisticated metrics by which professional money managers are evaluated, Mr. Buffett's performance has slipped. William Sharpe, a Nobel laureate, devised two such measures: the Sharpe and information ratios. These ratios use modestly different formulas that take into account risk-free investments and broader stock-market performance to predict future performance of a given strategy. Put plainly, these are like batting averages that can be used to assess how a player will do when next coming to the plate.

Take Mr. Buffett's information ratio -- his risk-adjusted returns relative to stocks. This measure, calculated on a 10-year average of Berkshire returns, recently turned negative. This essentially implies that Mr. Buffett's chances of underperforming the stock market over the next decade are more than 50%. Ten years ago, they stood at 20%.

When making investments, Mr. Buffett also considers the option of hanging on to his cash. That's where the Sharpe ratio, which measures risk-adjusted returns above cash, comes in. Mr. Buffett's Sharpe ratio also has declined. It fell from more than one in the mid-1980s to 0.15 at the end of 2005. In plain English, this suggests his probability of underperforming cash over 10 years is now 44%.

How does Mr. Buffett stack up with other fund managers? Against 230 large-cap mutual funds surveyed by Morningstar, he still beats two-thirds of them based on his information ratio. Mr. Buffett does worse when his returns relative to cash are considered. His Sharpe ratio was exceeded by nearly 90% of the Morningstar funds.