In his latest letter to investors, Berkshire Hathaway Chairman Warren Buffett highlighted the company's short-term and long-term results. He also focused on what different accounting rules mean for the firm's different performance measures and why be believes "The American Tailwind," which he credits for making Berkshire's success possible, is here to stay. "It is beyond arrogance for American businesses or individuals to boast that they have 'done it alone,'" Buffett wrote. "The tidy rows of simple white crosses at Normandy should shame those who make such claims."

Berkshire's earnings

Since 1964, Berkshire's compound annual growth rate has averaged 20.5%  in market value and 18.7% on book value vs. 9.7% for the S&P 500 (including dividends). In 2018, Berkshire shares improved 2.8% in market value and 0.4% in book value, compared with a drop of 4.4% in the S&P 500. Buffett says that the firm's $4 billion earnings in 2018 are measured by generally accepted accounting principles (or GAAP), which he has criticized. Its operating earnings were close to $25 billion. Berkshire also had a $3.0 billion noncash loss tied to its stake in Kraft Heinz, a roughly $3 billion capital gain from its sales of investment securities, and a $20.6 billion loss related to a reduction in unrealized capital gains. "A new GAAP rule requires us to include that last item in earnings. As I emphasized in the 2017 annual report, neither Berkshire's Vice Chairman, Charlie Munger, nor I believe that rule to be sensible," Buffett explained. "Rather, both of us have consistently thought … this mark-to-market change would produce what I described as 'wild and capricious swings in our bottom line.'" Given its GAAP-affected financial results, Buffet suggests that investors focus their attention on operating earnings. Check out the gallery for more insights from the latest investor letter. READ MORE: Why brokers should be afraid of Amazon & Co's new venture Warren Buffett's 6 warnings for investors: 2015 How broker consolidation and industry alliances are changing the industry