Best laid plans. (Wall Street West).

The J. Paul Getty Trust board must wonder sometimes if the investment stars are aligned against it.

Like other institutional investors, the Getty stayed one-half or more in bonds from the 1970s through the first half of the 1990s, while the great bull run gathered steam.

In 1995, the Getty Trust board was so skeptical of equities it placed a collar on its then $4.6 billion investment portfolio. A collar is created by buying put options (the right to sell a stock in the future at a predetermined price) and selling call options (the right to buy a stock at a predetermined price).

With stocks surging in late 1995 and early 1996, the collar ended up costing Getty $400 million in offsetting gains, according to a Los Angeles Times report. In 1997, chastened Getty officials vowed never to bet against equities again.

Filings with the Internal Revenue Service show that as of June 30, 2001 67 percent of the $4.9 billion Getty investment portfolio was in stock, and the balance in government lOUs and corporate bonds.

Getty Chief Financial Officer Bradley Wells said that between June 30, 2001 and last week, the trust's investment portfolio had contracted by about another 10 percent. That would put the total pot at $4.4 billion--roughly back to where it was in 1995, before the stock-collar episode.

For reporting purposes, the portfolio peaked on June 30, 2000, at $6.1 billion. The picture today would be worse, save for the portfolio's bond portion, which has appreciated in the last three years and held down overall losses.

The inside word is that Getty staff members were told their positions might be cut in calendar 2003, due to poor portfolio performance.

Wells said there have been no layoffs yet, and the board is only now beginning to discuss the budget for the fiscal year that starts on June 30, 2003. No decisions have been made, although some programs would have ended anyway, he said.

Are three years of bear markets enough to turn the Getty away from equities again?

"We allocate about 65 percent of our portfolio to domestic and international equities, and in our view it is best to stick with the strategy we have," said Wells.