Bruce Berkowitz Buys Mercury General, Sears, Jefferies and Wells Fargo Warrants

Facing redemption pressure, it has been a while since Bruce Berkowitz bought his last new position. But in the quarter ended on March 31, he initiated a new position in insurance company Mercury General ( MCY ). He also added to his positions in Sears ( SHLD ), Jeffries ( JEF ) and Wells Fargo Warrants. He reduced Berkshire Hathaway ( BRK.A )( BRK.B ), Citigroup ( C ) and Goodman Sachs ( GS ).

Of course Bruce Berkowitz still has more than 80% of his portfolio in financials. His largest holding is AIG ( AIG ), which is 36% of all his stocks. Will AIG make or break Bruce Berkowitz ? We will wait to see.

Bruce Berkowitz initiated holdings in Mercury General Corp. His purchase prices were between $42.88 and $45.63, with an estimated average price of $41.32. The impact to his portfolio due to this purchase was 0.04%. His holdings were 70,900 shares as of March 31, 2012. Mercury General Corp. is engaged primarily in writing all risk classifications of automobile insurance in a number of states, principally California. He owned this stock before in Fairholme Focused Income Fund, but sold later. The stock now has a dividend yield of 5.4%.

Mercury released its first quarter results recently. Its net premiums written is almost flat from the same period last year, but its combined ratio declined to 97.6% from 98.2% in 2011, an important increase of 60 basis points.

Due to the improvement in the combined ratio, Mercury had net income of $73.4 million in the first quarter, compared to $58.2 million for the same period a year ago. The company declared a quarterly dividend of $0.61 per share.

Bruce Berkowitz continues to add to Sears, as the stock price declined. He now owns 156 million shares of Sears. He also added to Jefferies ( JEF ), which he has a lot of confidence in due to the investment of Leucadia ( LUK ).

He reduced his positions in St. Joe. ( JOE ), and sold out Goldman Sachs ( GS ).