NEW YORK, Feb 22 (Reuters) -

Warren Buffett on Saturday sent a cautionary message to the

U.S. government on Saturday in his annual letter to Berkshire

Hathaway Inc ( BRK/A ) shareholders, urging Washington to

maintain a stable currency and take care of those who get "short

straws in life."

"Paper money can see its value evaporate if fiscal folly

prevails," Buffett wrote. "In some countries, this reckless

practice has become habitual, and, in our country's short

history, the U.S. has come close to the edge."

The 94-year-old Buffett, arguably the world's most

famous investor, also acknowledged his advanced age in the

letter, telling shareholders he now uses a cane and will spend

less time fielding their questions at Berkshire's annual meeting

in May.

He nonetheless assured shareholders they would be in

good hands after he turns over the conglomerate's reins to Vice

Chairman Greg Abel, saying Abel has "vividly shown his ability"

to deploy capital.

Buffett's letter was accompanied by Berkshire's annual

report, where it reported a

third straight record annual operating profit, rising 27% to

$47.44 billion.

The company also ended 2024 with a record $334.2 billion

of cash and equivalents, reflecting high valuations and

aggressive stock sales, especially Apple ( AAPL ). Berkshire has

been a net seller of equities for nine straight quarters.

Despite his concerns about the country's fiscal situation,

Buffett said his company will continue to prefer owning

equities, primarily U.S. stocks, over cash, adding Berkshire is

"not finished."

Buffett did say Berkshire is likely to increase its stakes

in all five Japanese trading houses it holds: Itochu ( ITOCF ),

Marubeni ( MARUF ), Mitsubishi ( MSBHF ), Mitsui ( MITSF ) and

Sumitomo ( SSUMF ).

Berkshire invested $23.5 billion in those companies at

year end.

Buffett has lamented the lack of buying opportunities over

the last few years as stocks regularly set new highs, with the

Standard & Poor's 500 hitting a new high on Wednesday and

the Nasdaq just 3% below its December 16 peak.

Berkshire's own stock price has risen 15% in the last year,

while the S&P 500 rose 18%. Over the last decade, Berkshire's

stock price has risen 225%, while the index rose 241% including

dividends and 185% excluding dividends, Reuters data show.

Buffett is expected to disclose more about Berkshire and its

outlook on May 3 when the company hosts its annual meeting in

Omaha, Nebraska.

The meeting, which typically draws tens of thousands of

people, will be shorter this year and not feature its

traditional film.

In discussing his age, Buffett said he talks regularly on

Sundays with his 91-year-old sister Bertie, using an

old-fashioned phone.

"We cover the joys of old age and discuss such exciting

topics as the relative merits of our canes," he said. "In my

case, the utility is limited to the avoidance of falling flat on

my face."