Berkshire Hathaway’s profits tumbled 96% in the fourth quarter to $117 million, from $2.9 billion a year earlier.

As bad as that performance was, the results “could have been a lot worse,” Morningstar Analyst Bill Bergman told The Wall Street Journal. “It’s the worst economic environment in recent history, and despite that, they’ve performed well.”

Berkshire CEO Warren Buffet said he does not expect the economy to improve in the near term—and that the economy will continue to be “in shambles” throughout 2009. However, he believes the outlook is strong looking a few years out. In his annual letter to shareholders, Buffet 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. America’s best days lie ahead.”

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