Investors eagerly await Warren Buffett’s letter to Berkshire Hathaway Inc. shareholders each year for its plain-spoken insight into the billionaire’s financial strategy and economic predictions. Buffett had plenty of good news to discuss Saturday as he recounted the performance of his Omaha, Neb., based company with humor and wit. He also dispensed some investing advice.

Here’s some of what Buffett had to say:

Swing Both Ways When It Comes To Investing

Buffett said Berkshire likes to buy businesses outright, but also will invest large sums in stock or partial ownership of a company, to increase its profit opportunities.

“Woody Allen stated the general idea when he said: `The advantage of being bisexual is that it doubles your chances for a date on Saturday night.’ Similarly, our appetite for either operating businesses or passive investments doubles our chances of finding sensible uses for our endless gusher of cash.”

Know Your Limitations

“You don’t need to be an expert in order to achieve satisfactory investment returns. But if you aren’t, you must recognize your limitations and follow a course certain to work reasonably well. Keep things simple and don’t swing for the fences. When promised quick profits, respond with a quick `no.”‘

For investors who don’t have the skills or time to estimate the value of investing, Buffett recommends making regular purchases of a low-cost stock index fund and resisting the urge to actively trade.

“So ignore the chatter, keep your costs minimal, and invest in stocks as you would in a farm.”

Longevity

The 83-year-old Buffett devoted a section of his letter to praising Rose Blumkin and her Nebraska Furniture Mart home furnishings store, which Berkshire bought in 1983.

“Though the company’s financial statements were unaudited, I had no worries. Mrs. B simply told me what was what, and her word was good enough for me,” Buffett said. “Mrs. B was 89 at the time and worked until 103—definitely my kind of woman.”

Pension Problems

Buffett predicts that many cities and states will experience financial problems in the years ahead because they promised too much in their pension plans.

“Citizens and public officials typically underappreciated the gigantic financial tapeworm that was born when promises were made that conflicted with a willingness to fund them. Unfortunately, pension mathematics today remain a mystery to most Americans.” He added that investment policies play an important role in these problems, as well.

Buffett has been predicting pension problems since 1975 when he wrote a memo to The Washington Post’s publisher after Berkshire invested in that newspaper.

“During the next decade, you will read a lot of news—bad news—about public pension plans.”

Buffett’s Record

When reviewing the performance of Berkshire‘s manufacturing, service and retail businesses, Buffett acknowledged making mistakes in the past. Buffett said some of Berkshire‘s businesses deliver very poor returns.

“I was not misled: I simply was wrong in my evaluation of the economic dynamics of the company or the industry in which it operated,” he said.

“Fortunately, my blunders usually involved relatively small acquisitions. Our large buys have generally worked out well and, in a few cases, more than well. I have not, however, made my last mistake in purchasing either businesses or stocks. Not everything works out as planned.”