In his annual letter to Berkshire shareholders, the 92-year-old Buffett urged investors to focus on the big picture over the long term, rather than higher inflation and other factors that in 2022 dampened stock prices, though not Berkshire's.
He also urged Americans not to be convulsed by "self-criticism and self-doubt," saying the country's dynamism has benefited Berkshire in his 58 years running the company from Omaha, Nebraska, and will do so after he passes the reins.
"We count on the American Tailwind and, though it has been becalmed from time to time, its propelling force has always returned," Buffett wrote.
"I have yet to see a time when it made sense to make a long-term bet against America. And I doubt very much that any reader of this letter will have a different experience in the future."
Berkshire also repurchased $7.9 billion of its own stock in 2022, signaling confidence it was undervalued. Buffett defended buybacks, a target of politicians in Washington.
The letter was accompanied by Berkshire's year-end results, including a record $30.8 billion operating profit.
Buffett called 2022 a "good year" for Berkshire, with many of its strongest businesses withstanding pressures from elevated inflation, rising interest rates and supply chain disruptions.
Berkshire also posted a $22.8 billion annual net loss, compared with an $89.8 billion gain in 2021, as the prices of Apple Inc (AAPL.O) and many other stocks in its vast investment portfolio declined.
Buffett downplays net results because they are volatile and affected by accounting rules.
Berkshire owns dozens of operating businesses including the Geico car insurer, BNSF railroad, and well-known consumer brands such as Dairy Queen, Duracell and Fruit of the Loom. It employs more than 382,000 people.
Multiple observers said Buffett appeared cautious, almost apologetic, about his struggles in navigating markets, though he is arguably the most famous living American investor. His $106 billion net worth ranks fifth worldwide, Forbes magazine said.
"Buffett is very humble in assessing his own investment prowess, and unnecessarily so," said Thomas Russo, a partner at Gardner Russo & Quinn and longtime Berkshire investor. "Investors have profited from him over decades."
Anyone who stuck with Berkshire from 1965 to 2022 saw their shares gain 3,787,464% in value. The Standard & Poor's 500 (.SPX) rose 24,708% including dividends over that period.
Buffett said most of his capital allocation decisions have been merely "so-so," and Berkshire's "satisfactory" results over time resulted from only about one dozen "truly good" decisions.
"'Efficient' markets exist only in textbooks," Buffett said. "In truth, marketable stocks and bonds are baffling, their behavior usually understandable only in retrospect."
Buffett also said "trust and rules are essential" in running large businesses, even amid the inevitable disappointments, and urged investors not to dwell on near-term market conditions.
Cathy Seifert, an analyst at CFRA Research, said Buffett took a "subtle swipe" at critics who wished he would disclose more than a few paragraphs about Berkshire's largest businesses, and invest more aggressively.
"The current market climate has been, for a lack of a better word, very schizophrenic," Seifert said. "Buffett is expressing that frustration."
Despite paying $11.5 billion in October for the insurance company Alleghany Corp, Berkshire ended 2022 with $128.6 billion of cash, as it became a big seller of stocks including Taiwanese semiconductor maker TSMC (2330.TW) late in the year.
Buffett, a Democrat, appeared in his letter to indirectly criticize President Joe Biden who this month urged a quadrupling of a 1% tax on corporate stock buybacks that became law in his Inflation Reduction Act last August.
While Biden hasn't demanded an end to buybacks, Buffett said those who claim all repurchases "are harmful to shareholders or to the country, or particularly beneficial to CEOs" are "either an economic illiterate or a silver-tongued demagogue."
Bill Smead, a longtime Berkshire investor at Smead Capital Management, said: "He's poking fun at people who try to add money without adding value."
Buffett also reminded investors how much Berkshire gives back to the U.S. Treasury, paying $32 billion of federal income taxes over a decade.
"At Berkshire we hope and expect to pay much more in taxes during the next decade," Buffett wrote. "We owe the country no less."
While Berkshire has tapped Vice Chairman Greg Abel, 60, as Buffett's eventual successor as chief executive, Buffett used his letter to renew his affection for his friend and business partner Charlie Munger, the 99-year-old Berkshire vice chairman.
He said both will in early May attend Berkshire's annual shareholder weekend, which is known as "Woodstock for Capitalists" and draws tens of thousands of people to Omaha.
"I never have a phone call with Charlie without learning something," Buffett said. "And, while he makes me think, he also makes me laugh."