Buffet says U.S. economy in shambles, better days ahead

Stocks and the economy will rebound, and the best days for the U.S. are ahead, Buffett said in his annual letter to shareholders on Saturday adding that he would spend the recession shopping for new investments for Omaha, Nebraska-based Berkshire.

"The economy will be in shambles throughout 2009 -- and, for that matter, probably well beyond," he said. "Though the path has not been smooth, our economic system has worked extraordinarily well over time. It has unleashed human potential as no other system has, and it will continue to do so," Buffet added.

Berkshire's profit fell 96 percent, the fifth straight quarterly decline, and its net worth tumbled $10.9 billion in the year's final three months. Net worth per share fell 9.6 percent in 2008, only the second decline since Buffett began running Berkshire in 1965. It fell 6.2 percent in 2001, Reuters reported on its website.

Berkshire generates about half its results from insurance, including auto insurer Geico Corp, but operates more than 70 businesses that offer such things as carpeting, ice cream, paint, real estate services and underwear.

Buffett is one of the world's most-admired investors, and Forbes magazine last year called him the second-richest American.