"In the next 53 years our shares (and others) will experience declines resembling those in the table".
One goal is to reduce the growth of health care costs, now at 18 percent of the national economy, Buffett said. And yet his $116bn in the bank does suggest he is now trying to do just that, or at least be very patient in anticipation of a major slump in stock prices. During the 10 year bet, the hedge fund managers involved nearly certainly made tens of thousands of buy and sell decisions. Buffett contrasts his "kindergarten-like" analysis to the amount research and trading that the hedge fund managers did.
Cramer, who said he watched every minute of Buffett's CNBC appearance, described it as "the most important three hours you're going to get about securities analysis". These lessons are a gift to investors. "Each has been with Berkshire for decades, and Berkshire's blood flows through their veins".
Buffett also says this is a strong argument against leverage, writing, "even if your borrowings are small and your positions aren't immediately threatened by the plunging market, your mind may well become rattled by scary headlines and breathless commentary".
Buffett's Berkshire Hathaway reports record profit
He likened the situation to 1991, when Buffett was installed as chairman of Salomon Brothers Inc amid a bond trading scandal that almost landed that company in bankruptcy. Often, high-grade bonds in an investment portfolio increase its risk.
Buffett declared in his 2015 annual shareholder letter that he has found the "right person", but he didn't offer any further details.
First there is a clear warning about an impending stock market disaster: Mr Buffett has not been buying stocks. "I imagine prices will come down for some time".
Why keep all that cash?
Berkshire also owns clothing, furniture and jewelry firms. "As well-known analyst V.J. Dowling has pointed out, the loss reserves of an insurer are similar to a self-graded exam. Ignorance, wishful thinking or, occasionally, downright fraud can deliver inaccurate figures about an insurer's financial condition for a very long time". He won that bet past year. Will it carry on beating the market as he has so spectacularly in the past 53 years?
Known as the "Oracle of Omaha" - after his birthplace in the Midwestern state of Nebraska - Buffett is one of the world's most successful investors and one of its richest men. And in but one year, the index beat the average generated by the hedge funds.
Still, Berkshire Hathaway has owned and invested in businesses with questionable practices in the past. That's all very sound advice.
More flooding expected this weekend in Midwest
At major flood stage, the Ohio River will affect low-lying properties and may enter homes and outbuildings adjacent to the River. M-21 in Ionia County is closed east of Muir, as the Maple River is expected to go over the bridge.