Warren Buffett's latest annual Berkshire Hathaway shareholder letter, out this weekend, is the usual mix of self-serving hype and genuinely insightful commentary. In the insightful category seems to be this, on why stocks are a "much better long-term choice" than bonds:
If something close to current [interest] rates should prevail over the coming decades and if corporate tax rates also remain near the low level businesses now enjoy, it is almost certain that equities will over time perform far better than long-term, fixed-rate debt instruments. That rosy prediction comes with a warning: Anything can happen to stock prices tomorrow. Occasionally, there will be major drops in the market, perhaps of 50% magnitude or even greater. But the combination of The American Tailwind, about which I wrote last year, and the compounding wonders described by Mr. Smith, will make equities the much better long-term choice for the individual who does not use borrowed money and who can control his or her emotions.
