This morning, the Dow is trading below 7,000 for the first time since October 28, 1997. It’s just got to be the bottom, right? I wouldn’t bet on it. But anyone’s who put money into the stock market is in the exact same punctured raft. And yes, I’m including that sage of stock-picking, Warren Buffett.

Over the weekend, Buffett sent out his annual letter to Berkshire Hathaway shareholders. Buffett got beat up so bad last year, his stock portfolio is now exactly the same as its nominal cost basis, which means his return is zero, not counting dividends. That hasn’t been the case for decades.

Buffett owned up to his mistakes from the past year, like not selling Wells Fargo stock when he had the chance. And he delivered a few of his famous analogies. I like the one below, where he’s describing what happened to all investors, big and small, no matter what kind of stock they owned:

They were “bloodied and confused, much as if they were small birds that had strayed into a badminton game.”

Buffett continued the good cheer by saying the economy “will be in shambles throughout 2009.” But he also expressed optimism about the long-term — “America’s best days lie ahead.”

I guess I take a little perverse comfort in knowing that even the Oracle of Omaha got it wrong. I just hope he’s right about the long-term.

Some various takes on the Buffett letter — from the Wall Street Journal, from 24/7 Wall Street, and from Jeff Matthews.