It's that time of year again: Berkshire Hathaway's Annual Chairman's Letter

Mr. Buffett, in his annual letter closely read by shareholders and nonshareholders alike, said he didn't expect an improved economy any time soon but did expect better times eventually.

"Our country has faced far worse travails in the past," he said. "Without fail, however, we've overcome them." He declined to draw a correlation between stocks and economics, saying that while he was certain the economy would be "in shambles for 2009" that "does not tell us whether the stock market will rise or fall."

In 2008, Berkshire's Class A stock fell 32%. This year the shares are down about 19%, slightly better than the Dow Jones Industrial Average.

Mr. Buffett credited the federal government for stepping in with massive assistance last year, saying the intervention was "essential" to avoiding a total breakdown. But he cautioned there could be "unwelcome aftereffects," such as inflation.

On oil, he said "odds are good that oil sells far higher in the future than the current $40 to $50 price. But so far I have been dead wrong." And on Treasurys, he contended that the "investment world has gone from underpricing risk to overpricing it." Future historians will comment on the Internet bubble of the 1990s and the housing bubble of the early 2000s, he said, but " the U.S. Treasury bond bubble of late 2008 may be regarded as almost equally extraordinary."

Warren Buffett's Berkshire Hathaway Reports Worst Year Ever In Annual Letter to Shareholders (Wall Street Journal)

Related: Berkshire Hathaway 2008 Chairman's Letter (PDF)