As a rule of thumb, the richest man in the world is probably worth listening to when it comes to investment advice. Warren Buffett's promotion to the top of Forbes' list of billionaires came only days after publication of his latest letter to shareholders in Berkshire Hathaway, the investment company he heads. It should be clear which document best repays attention.

While the headlines concentrated on Mr Buffett's comments on sovereign wealth funds and the succession race at Berkshire, the billionaire also warned about the dangers of over-optimistic assumptions about pension returns. He estimates that big US companies with defined-benefit pension plans are assuming that their equity holdings will earn 9.2 per cent annually, after fees. As Mr Buffett points out, that is well ahead of the 5.3 per cent annual compound growth of the Dow Jones Industrial Average last century. Just to match that rate this century, the Dow - currently below 13,000 - would have to close at 2,000,000 on December 31 2099. Anybody expecting double-digit annual growth - 2 per cent from dividends, and the rest for price appreciation - is, in effect, betting on Dow 24,000,000 by the end of the century.