Special Report: One Year Later It Was the Best of Times

By Stephen Koepp

For many people, the Crash of '87 turned out to be a heart-stopping carnival ride that dropped them off just about where they had been before the stock- price run-up that preceded the collapse. But others found their worlds turned upside down. Last year's bulls are this year's goats, and bad-news bears are best-selling authors. A gallery, starting with who's up:

WHEN ZWEIG TALKS, PEOPLE LISTEN. Analysts who foretold the crash have achieved guru status. Chief among them may be Marty Zweig, 46, who publishes the Zweig Forecast newsletter and manages $1.3 billion in pension funds from his Manhattan headquarters. Zweig turned bearish in September 1987 and predicted that the Dow Jones average would soon plunge 1,000 points, to 1755 (the actual bottom: 1738). In the year since his prediction came true, with most newsletters sagging, his subscriber list has grown 90%, to 15,275 (at $245 a year).

HE NEVER PROMISED YOU A ROSE GARDEN. Quite the opposite, but everything's coming up profits anyway for doomsayer Ravi Batra, 45, the economics professor at Southern Methodist University who wrote The Great Depression of 1990. First published by a small press in 1985 and then by Simon & Schuster in June 1987, the book sold more than 500,000 copies in hard cover. His promptly produced sequel, Surviving the Great Depression of 1990, was released last month with a first printing of 200,000.

RIDING A SMALL, FAST-MOVING VEHICLE. Anticipating the collapse, the managers of suburban Chicago's relatively tiny Mathers Fund moved 62% of its assets into cash in the months before Oct. 19. Then they plunged back into the market during the last 45 minutes of Black Monday and kept buying for nine days. Since then, their purchases have surged in value, helping to boost the Mathers Fund from $154 million in assets just before the crash to $201 million now. Its increase of 27% during 1987 was the best performance by any U.S. growth fund.

NOW WE CAN HIRE SOME OF THOSE M.B.A.S TO GO MAKE SOAP IN CINCINNATI. The crash should help U.S. industrial companies by slowing the investment-banking brain drain, in which so many of the most talented business school graduates were going to Wall Street. Recruiters for companies ranging from General Motors to IBM find that 1988 grads are showing a renewed interest in running factories rather than financings.

THOSE CORPORATE RAIDERS CAN ALWAYS SMELL A BARGAIN. Takeover artists, restrained by high stock prices before the crash, have gone on a shopping spree once again. Florida-based financier Paul Bilzerian, 38, acquired the Singer Co. for $1.06 billion last February partly because the crash had depressed its stock price. Since then, Bilzerian has sold off eight of Singer's twelve divisions for a total of $1.94 billion, more than enough to cover all his costs. In the end, he is expected to reap a $300 million profit. The Government is investigating his earlier raids for possible securities-law violations, which he denies having committed.

SCARED OF THE MARKET? HAVE I GOT A DEAL (HEH, HEH) FOR YOU! Con artists have enjoyed a banner year since the crash by preying on small investors who have grown leery of the market. In September state securities regulators warned that investors could lose $250 million this year to hucksters peddling bogus gold-mine shares. The hottest scam is the so-called dirt-pile gold mine. Typically, investors are urged to buy 100-ton units of unprocessed ore (average price: $5,000), which are guaranteed to contain 20 oz. of the precious metal, whose price is hovering around $400 per oz. That would be a good deal, except that the gold is usually unrecoverable or nonexistent.

BREAK UP THAT DYNAMIC DUO. Wall Streeters believed at first that Black Monday was the ultimate downer. Then the Wall Street Journal's reporting team of Daniel Hertzberg and James B. Stewart disclosed that on Terrible Tuesday, Oct. 20, things were so bad the New York Stock Exchange came within a whisker of shutting down. Says Hertzberg: "The market came closer to a breakdown than people realize. We were near total financial gridlock." For that story and a report on insider trading, they won a Pulitzer Prize (the cash award: $1,500 each). But now the team has been broken up by its own success. This month the lanky Stewart, 37, a Harvard-trained lawyer and prolific writer, took over as Page One editor at the Journal, and the energetic Hertzberg, 42, a persistent investigator, was promoted to editor of markets and investing.

ANY IDEAS FOR FIXING THIS THING? In the numerous postcrash probes, two leaders emerged from opposite political poles. U.S. Representative Edward Markey, 42, a Massachusetts Democrat who had been known as a liberal gadfly until he took over as chairman last year of the House Subcommittee on Telecommunications and Finance, earned grudging respect from the markets for his well-considered reform proposals. His insider-trading bill passed the House 410 to 0 and awaits Senate consideration. Nicholas Brady, 58, the Republican investment- house executive who headed a presidential commission on the crash, delivered a report that startled Wall Street by calling for tough curbs on its freewheeling ways. Brady's independent streak no doubt helped him earn his appointment last month as Treasury Secretary.

With reporting by Lisa Kartus/Chicago and Martha Smilgis/New York