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Peter J. Eichler Jr., founder and CEO of Aletheia Research and Management, comes from a line of businessmen. He is the grandson of Henri de La Chapelle, one of the original partners of Paine Webber Jackson & Curtis, an investment banking, asset management and stock brokerage firm acquired by UBS AG in 2000. He is also the grandson of Rudolph J. Eichler, the founder of Bateman Eichler & Co, which was one of the largest and most profitable regional securities firms under the guidance of Eichler’s father, Peter J. Eichler, Sr.

Eichler has been managing money professionally since 1990 and has been in the securities industry for more than 30 years. He began his career in the industry when he was 17, working as a floor clerk on the Pacific Coast Stock Exchange. After graduated from Santa Clara University, he also worked at Bateman Eichler, E.F. Hutton & Co, Prudential Securities, Crowell Weedon and Bear Stearns & Co. During his 12 years at Bear Stearns, Eichler established the Special Accounts Money Management Division and created the Bear Stearns Insiders Fund. Finally in 1997, Eichler founded Aletheia and served as the CEO of the company since then.

Here is a list of top 20 position of Aletheia’s portfolio at the end of the third quarter:

Company Name

Ticker

Value

Activity

COCA-COLA CO

KO

136850

-28%

INT'L BUSINESS MACHS

IBM

121525

-47%

MCDONALD'S CORP

MCD

119982

-33%

NEWMONT MINING CORP

NEM

117920

-43%

BARRICK GOLD CORP

ABX

108369

-28%

EXXON MOBIL CORP

XOM

106571

-43%

ISHARES TRUST

SLV

88383

-16%

BOEING CO

BA

86463

-27%

CANADIAN NATURAL RES

CNQ

83444

-26%

EBAY INC

EBAY

79326

-44%

NOVAGOLD RESOURCES INC

NG

74644

-28%

FREEPORT MCMORAN

FCX

69379

-28%

INTEL CORP

INTC

69319

-28%

CONTINENTAL RESOURCES

CLR

68815

-33%

SPDR GOLD TRUST

GLD

68341

-36%

CATERPILLAR INC

CAT

66706

-24%

WAL-MART STORES INC

WMT

66183

-37%

DEERE & CO

DE

61391

-28%

MARVELL TECHNOLOGY

MRVL

58068

-17%

LAS VEGAS SANDS CORP

LVS

56928

-35%

Aletheia reduced its portfolio value from $5.6 billion at the end of the second quarter to $3.4 billion at the end of September. It also reduced the number of positions in its portfolio. Aletheia reported to hold 180 various positions at the end of June and it owned 175 positions at the end of the third quarter. Aletheia sold out 12 positions in total.

The largest position it sold out over the third quarter was Crown Castle International Corp (NYSE:CCI). Aletheia had $23 million invested in CCI at the end of June. Luckily, Aletheia avoided suffering a loss in this position as CCI is down 3.02% so far since the end of September, while SPY returned 2.82% in the same period. Aletheia also sold out Dell Inc (NASDAQ:DELL), Ameron International Corp (NYSE:AMN), American Express Co (NYSE:AXP), General Electric Co (NYSE:GE), Ingersoll Rand Plc (NYSE:IR), Mesabi Trust (NYSE:MSB), Starwood Hotels & Resorts Worldwide Inc (NYSE:HOT), Valero Energy Corp (NYSE:VLO), Potash Corp Saskatchewan Inc (NYSE:POT), and Brookfield Residential Properties Inc (NYSE:BRP).

Over the third quarter, Aletheia reduced its stakes in most of its positions, while increasing its holdings in Opko Health Inc (NYSE:OPK) by 145%. Aletheia disclosed to own $53.8 million worth of OPK at the end of the third quarter. OPK gained 11.32% since the end of September, beating the SPY by over 8 percentage points. Aletheia also significantly increased its position in Golar LNG Ltd (NASDAQ:GLNG) to $28.3 million. GLNG was up 21.99% so far since September 30, outperforming the market by 19%. Aletheia also increased its stakes in Citigroup Inc (NYSE:C), Silver Wheaton Corp (NYSE:SLW), and Novellus Systems Inc (NASDAQ:NVLS).

Aletheia bought new stakes in Chesapeake Energy Corp (NYSE:CHK). The fund initiated a brand new $36.2 million worth of CHK over the third quarter. However, CHK was down 12.25% so far since the end of September despite its strong third-quarter revenue and earnings. Curtis Macnguyen’s Ivory Capital also suffered losses from this position as Macnguyen had over $70 million invested in the stock at the end of September.

Aletheia was also bullish about Coca-Cola Co (NYSE:KO), International Business Machines Corp (NYSE:IBM), McDonald's Corp (NYSE:MCD), Newmont Mining Corp (NYSE:NEM), Barrick Gold Corp (NYSE:ABX), Exxon Mobil Corp (NYSE:XOM), iShares Trust (NYSEARCA:SLV), Boeing Co (NYSE:BA), Canadian Natural Resources Ltd (NYSE:CNQ), and eBay Inc (NASDAQ:EBAY). These ten largest positions generated a weighted average return of 2.13% since the end of the third quarter, slightly lower than the 2.82% of SPY. This is a bit expected because these are generally more conservative bets.

It is clear that Aletheia is extremely concerned about the turmoil in financial markets and cut its bets on risky stocks significantly. We encourage investors to focus on the stocks Aletheia was increasing its stakes. Buying deep in the money call options on these stocks will provide some protection in case Europe’s problems lead to double-digit loses in the stock market.

Disclosure: I am long C, CHK.