A little perspective is warranted here. Buffett's stumble came during the worst year for equities since the 1930s and Berkshire's book value fell only 9.6 per cent. In other words, it fared 27.4 percentage points better than the S&P500 when dividends are included. An investment with Buffett has returned 84 times that of equities overall since 1965.

As in the past, he admits to some investment errors in timing and judgment – confessing, for example, that one of the “dumb things” he did was to buy a large amount of ConocoPhillips stock shortly before oil and gas prices collapsed. But Buffett usually plays the odds masterfully and now says risk is grossly overpriced. His still-enormous cash pile insulates him from disaster and allows him to be shrewdly opportunistic, even if, on occasion, he did not quite pick the bottom of the market. He thus betrays no concern over the $14.5bn in plain and hybrid debt he bought from Wrigley, Goldman Sachs and General Electric. Investors are also jittery over $37bn in puts he wrote on various equity indices maturing in 15 to 20 years. His mark-to-market loss is already $10bn, or double the premium received. But, with no need to post collateral, stocks at 12-year lows and plenty of time remaining on those bets, his losses exist on only paper.