OMAHA, Neb. (AP) — Billionaire Warren Buffett maintained a typically optimistic tone in his annual letter to Berkshire Hathaway shareholders.
The successful investor's letters are also well read because of his successful track record and his knack for explaining complicated subjects in simple terms.
Here are five key business and life lessons Buffett covered this year:
Listening to presidential candidates talk about the state of the country can make things seem dire, but Buffett said the economy is in a much better state than the candidates describe. Buffett supports Democrat Hillary Clinton, but he seemed to direct the criticism at all the presidential candidates.
"Today's politicians need not shed tears for tomorrow's children," he said. "Indeed, most of today's children are doing well. All families in my upper middle-class neighborhood regularly enjoy a living standard better than that achieved by John D. Rockefeller Sr. at the time of my birth."
Buffett has a reputation for buying well-run companies and then largely letting them continue to run themselves. So some shareholders have questions Berkshire's association with 3G Capital, which is known for cost cutting. Berkshire teamed with 3G to buy Heinz and Kraft Foods, and 3G promptly announced layoffs at both.
"At Berkshire, we, too, crave efficiency and detest bureaucracy," he said. "To achieve our goals, however, we follow an approach emphasizing avoidance of bloat, buying businesses such as Precision Castparts that have long been run by cost-conscious and efficient managers."
And improving productivity is good for the country overall even if some workers lose their jobs. Buffett said the key is having a solid safety net to help displaced workers.
Berkshire just completed its biggest acquisition ever with its $32.36 billion acquisition of aircraft parts manufacturer Precision Castparts. On Monday Berkshire completed its purchase of Duracell.
After those deals, Buffett said Berkshire now owns 10¼ companies that would be big enough to be included in the Fortune 500 list if they were still independent. But he's still shopping.
"That leaves just under 98 percent of America's business giants that have yet to call us. Operators are standing by," he said.
For the first time ever, Berkshire's annual shareholder meeting on April 30 will be streamed online so investors anywhere will be able to watch the 85-year-old Buffett and his 92-year-old Vice Chairman Charlie Munger answer questions.
The event drew roughly 40,000 people last year, so part of the reason for the change is the capacity of the arena and hotels in Omaha. But Buffett said shareholders also deserve the chance to observe the company's top executives directly to make sure they haven't "drifted off into la-la land."
Investors should be sure they understand what companies include when they talk about their earnings because Buffett said executives sometimes try to exclude stock-based compensation or depreciation. And amortization figures can be misleading.
"When CEOs or investment bankers tout pre-depreciation figures such as EBITDA as a valuation guide, watch their noses lengthen while they speak," Buffett said.