“I’ve been investing for 80 years—greater than one-third of our nation’s lifetime. Regardless of our residents’ penchant—virtually enthusiasm—for self-criticism and self-doubt, I’ve but to see a time when it made sense to make a long-term wager in opposition to America,” Mr. Buffett mentioned within the letter.

Mr. Buffett, broadly considered one of many world’s prime buyers, has been publishing the letters for greater than half a century. Over that point, he hasn’t simply mirrored on the previous 12 months for his firm, Berkshire Hathaway Inc., but additionally shared his ideas on the whole lot from esoteric accounting guidelines to his aversion to extreme risk-taking. 

Saturday’s letter supplied readers a glimpse into how Mr. Buffett, 92, seen what wound up being a shaky stretch for markets. Mr. Buffett’s portfolio took a success, too, with Berkshire posting a loss for 2022 largely on account of funding losses.

The volatility supplied Berkshire a chance to leap in and purchase shares. Whereas Berkshire largely purchased again its personal shares in 2021, it targeted extra in 2022 on investing in different firms—opening up new positions in media firm

Paramount World

and building-materials producer

Louisiana-Pacific Corp.

, amongst different companies, and swiftly changing into

Occidental Petroleum Corp.’s

single-biggest shareholder. 

As of the top of 2022, Berkshire was the biggest shareholder of eight firms—American Categorical Co., Financial institution of America Corp.,

Chevron Corp.

,

Coca-Cola Co.

,

HP Inc.,

Moody’s Corp.

, Occidental and Paramount World.

Berkshire is ready to make large investments as a result of its insurance coverage operations generate billions of {dollars} of float, or premiums that prospects pay upfront, which Berkshire can in flip put to work within the markets. Its acquisition final 12 months of property-casualty insurer Alleghany Corp. helped enhance its insurance coverage float—which Mr. Buffett referred to as a rare asset for Berkshire—to $164 billion final 12 months, Mr. Buffett mentioned.

How do Mr. Buffett and right-hand man

Charlie Munger

resolve the place to place that cash? Each have mentioned they chorus from basing their selections on the place they assume rates of interest, oil costs, or different components that have an effect on markets can be in a 12 months’s time.

“Although economists, politicians and most of the public have opinions in regards to the penalties of that vast imbalance, Charlie and I plead ignorance and firmly consider that near-term financial and market forecasts are worse than ineffective,” he mentioned in Saturday’s letter.

As a substitute, the 2 deal with investing Berkshire’s cash in “a way that can obtain a suitable outcome over time and that can protect the corporate’s unmatched endurance when monetary panics or extreme worldwide recessions happen,” he mentioned. Berkshire reported having money and money equivalents of $128.6 billion on the finish of 2022, down from a near-record $146.7 billion on the finish of 2021 however up from the third quarter.

Whereas Berkshire’s authentic enterprise, a New England textile operation, now not exists, Mr. Buffett mentioned Berkshire has continued to have the ability to ship returns to shareholders due to its deal with what he referred to as the American tailwind.

“America would have finished wonderful with out Berkshire. The reverse isn’t true,” he mentioned. In his letter, Mr. Buffett additionally defended the observe of inventory buybacks. Berkshire spent practically $8 billion repurchasing its shares in 2022, down from a report of $27 billion the earlier 12 months.

Though critics of buybacks contend that firms can be higher off investing that cash into their companies, proponents, like Mr. Buffett, say they will profit shareholders if they’re executed when an organization’s share worth is buying and selling beneath its worth.

“If you find yourself instructed that every one repurchases are dangerous to shareholders or to the nation, or notably useful to CEOs, you’re listening to both an financial illiterate or a silver-tongued demagogue,” he mentioned.

Berkshire additionally launched its outcomes for 2022 Saturday.

The Omaha, Neb., firm, which owns companies together with insurer Geico, railroad BNSF Railway and chocolate maker See’s Candies, posted a lack of $22.82 billion for the 12 months, stung by $67.9 billion in funding and by-product contract losses. In 2021 when shares surged, Berkshire posted a revenue of $90.8 billion.

Whole income rose 9.4% to $302.1 billion.

Berkshire’s working earnings, which exclude some funding outcomes, rose to a report $30.8 billion. For the fourth quarter, working earnings fell 8% to $6.7 billion, weighed down by decrease earnings at its railroad enterprise.

Mr. Buffett, Berkshire’s chief government, has lengthy held that working earnings are a greater reflection of how Berkshire is doing, since accounting guidelines require the corporate to incorporate unrealized beneficial properties and losses from its huge funding portfolio in its web revenue. Risky markets could make Berkshire’s web revenue change considerably from quarter to quarter, no matter how its underlying companies are doing.

“Capital beneficial properties, to make certain, have been massively vital to Berkshire over previous many years, and we count on them to be meaningfully optimistic in future many years,” Mr. Buffett mentioned in his letter. “However their quarter-by-quarter gyrations, often and mindlessly headlined by media, completely misinform buyers,” he mentioned, including that he and Mr. Munger urge shareholders to focus as an alternative on Berkshire’s working earnings.

Write to Akane Otani at akane.otani@wsj.com