Peace, Love and Return on Equity

Word has it that if you play the audiotape of the 2010 Berkshire Hathaway annual meeting backward, all of Warren Buffett's investing secrets will be revealed.

Image: Portfolio.com; designed by Sean Driscoll

The "Woodstock of Capitalism" is of course no ordinary event. Berkshire Hathaway's annual meeting is a three-day extravaganza that includes concerts, cocktail parties, an unofficial "Tweetup" and appearances by a U.S. chess champion, a magician and the top-ranked junior table tennis player.

Attendance should be boosted by new shareholders who bought the famously expensive stock after the 50-1 split last January when Berkshire chief Warren Buffett bought railroad operator Burlington Northern Santa Fe Corp.

Beside the picnics and the brunches, shareholders will have an opportunity to ask Warren Buffett pressing questions about the company's future direction—and share price. According to gurufocus.com, Berkshire had a return of minus- 32 percent in 2008 and returned only 2.7 percent in 2009, a pittance compared with the S&P 500's 23.5 percent gain.

Moreover, Buffett may have to answer difficult questions about the $5 billion it invested in Goldman Sachs, which is now the subject of a criminal investigation by the U.S. prosecutors in New York, who are deciding whether to bring charges. According to The New York Times, Berkshire has so far lost at least $1 billion due to the drop in Goldman's share price.

Goldman shares fell 8 percent to $147.10 on Friday amid reports of the criminal probe, and have lost about 18 percent of their value since the SEC announced April 15 that it had brought civil fraud charges against the firm. The shares doubled in value during 2009.

Still, in light of recent signs of economic recovery, the purchase of Burlington, recently hailed as "brilliant" by the CEO of rival railroad CSX, can only fill Buffett followers with renewed faith that the Oracle of Omaha indeed knows what the future holds.