Warren Buffett, perhaps the world's most admired investor, said on Thursday the financial panic that gripped the globe last year is a thing of the past, even as the U.S. economy's struggles persist.

The financial panic is behind us, the world's second-richest person said at Columbia University's business school. Our economy was sputtering, still is sputtering some.

Buffett, 79, nevertheless said there is greater opportunity for investments inside the United States than outside, noting that the U.S. economy is far larger than any other.

He appeared at Columbia with Microsoft Corp founder Bill Gates, the world's richest person and a Buffett friend and bridge partner.

Last month, preliminary government data showed the U.S. economy expanded in the third quarter, the first three-month period of growth since the second quarter of 2008.

Nonetheless, the U.S. unemployment rate last month reached 10.2 percent, the first double-digit reading in 26 years.

Buffett last week made a big bet on the U.S. economy when his Berkshire Hathaway Inc agreed to pay about $26.4 billion for the 77 percent of railroad company Burlington Northern Santa Fe Corp that it did not already own.

There will be more people in this country, 10, 20, 30 years from now, Buffett said. They'll be moving more and more goods back and forth to each other and the most environmentally friendly and cost-efficient way of doing that is railroads.

Buffett said rail transport uses one-third less fuel and pollutes the air less than trucks, and that one train can supplant about 280 trucks.

Gates, who is also a Berkshire director, said other sectors might also boost the economy over the long term, including information technology, energy and medicine.

Separately, Buffett advised the U.S. government not to coddle companies that need bailouts to survive or preserve capital.

More sticks are called for, he said.

Buffett gave Federal Reserve Chairman Ben Bernanke and U.S. Treasury Secretary Timothy Geithner high marks for how they managed the financial crisis.

The billionaire has praised Bernanke in the past, while mocking Geithner's stress tests for banks.

CNBC television was a host for the Columbia event.

(Reporting by Clare Baldwin and Jonathan Stempel; Editing by Tim Dobbyn and Bernard Orr)

Bill Gates Timothy geithner Warren buffett Ben Bernanke