I've addressed this issue in previous posts, hence the somewhat zen offering - I think there is a lot of truth to it though. 

As for Buffett running a mutual fund, it's not a completely hypothetical question - he ran a limited partnership in the 1950-60s where he compounded returns at about 30% annualized.  The returns probably would have been somewhat lower if he was running a mutual fund - most obviously he couldn't have taken the 50-60% position in Amex due to diversification rules.  If you have a chance to read the partnership letters, I think they contain a lot of insight about what kind of investment manager you'd want for your own funds: link

I don't buy the argument that Buffett's results have more to do with his business acumen.  It's only in the past decade or so that business acquisitions have become the dominant mode of expansion for Berkshire.  Most of the big returns came from old-fashioned stock picking, e.g. Coca Cola, Washington Post, Amex, Well Fargo, etc. 

Best,
Oildog