OMAHA, Neb. —
Taking advice from Wall Street on deals is a bit like asking “the barber whether you need a haircut,” according to billionaire Warren Buffett.

Buffett said in his annual letter to Berkshire Hathaway shareholders Saturday that the current system of reviewing deals doesn’t always work well for investors because it almost always favors the deal that corporate CEOs propose. Companies should consider hiring two sets of advisers to argue for and against a deal before moving forward instead of just hiring a Wall Street firm that favors the deal, he wrote.

“Don’t hold your breath awaiting this reform: The current system, whatever its shortcomings for shareholders, works magnificently for CEOs and the many advisors and other professionals who feast on deals,” he wrote.

Buffett said he remains optimistic about the future of the conglomerate that he and his partner, Charlie Munger, have built over the decades, even though Buffett is 89 and Munger is 96 years old. Buffett said Berkshire’s managers and board members will protect the company after he and Munger are gone.

“We possess skilled and devoted top managers for whom running Berkshire is far more than simply having a high-paying and/or prestigious job,” Buffett wrote. “Finally, Berkshire’s directors — your guardians — are constantly focused on both the welfare of owners and the nurturing of a culture that is rare among giant corporations.”

In the fourth quarter, Berkshire reported earning $29.159 billion, or $11.94 per Class B share, because of a big improvement in the paper value of its investments. A year ago, Berkshire lost $25.4 billion, or $10.31 per Class B share, in the fourth quarter because of a big drop in the paper value of several of its stock investments.

Buffett has long said Berkshire’s operating earnings offer a better view of quarterly performance because they exclude investments and derivatives, which vary widely. By that measure, Berkshire’s operating earnings fell to $4.42 billion in the quarter, from $5.72 billion a year earlier.

The four analysts surveyed by FactSet expected Berkshire to report operating earnings of $3.589 billion in the fourth quarter.

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