"We expect Berkshire shares to benefit from strong growth in both book value per share and earnings, driven by its insurance and non-insurance businesses," wrote Gelb, who noted that as Berkshire's newer railroads, energy, housing, retail and manufacturing businesses have grown, insurance has become a smaller portion of Berkshire's annual earnings. The percentage contribution to operating earnings from Berkshire's non-insurance businesses increased from 43% in 2006 to 70% in 2012, according to Gelb.
Buffett has called Berkshire's cash an elephant gun to bag large acquisitions and said in his 2012 shareholder letter he remains on the prowl for big deals. At last year's shareholder meeting, Buffett said the firm had nearly signed onto a $20-billion acquisition, but dropped out over a disagreement on price. CNBC's David Faber reported earlier in 2013 that Berkshire was an unnamed bidder for NYSE Euronext ( NYX) in the stock exchange's proxy filing detailing its merger with IntercontinentalExchange ( ICE). If Buffett does shoot his so-called elephant guns for acquisitions, expect another high quality company such as Heinz or BNSF Railway to be within Berkshire's gaze. "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price," Buffett said in his 1989 shareholder letter. For some topics on investors' minds heading into Berkshire's annual meeting, see why Buffett's buyback math is a key to bank earnings. Also see why Berkshire will be taking a stake in Goldman Sachs later in 2013. -- Written by Antoine Gara in New York. Follow @antoinegara