(FORTUNE Magazine) – PRECISELY WHEN the tide turned is anybody's guess -- maybe with the 1987 bust of Ivan Boesky or the stock market crash later that year -- but at some point in the not-too-distant past the charmed intersection of economic and historical forces that made the 1980s so much fun, so darn lucrative, for so many began to give way to these lusterless 1990s, marked thus far by looming recession, toil, and gloom. No longer do the skies heave open and spew money upon the shrewd and the witless alike. Gone, even for the lucky ones drenched in that downpour, is the hallucinatory conviction that they earned the right to be rich along with their business degrees. Now, like the rest of us, they clutch tight their purses as they search for a sense of how to proceed. No one knows where the 1990s will take us, but the path ahead will likely be hard. In the pages that follow, seven who rode the wild wave of the 1980s describe their experiences in that tumultuous age -- and talk of their strategies for the decade to come. Connected in one way or another to Wall Street, all were creatures of the time, amassing wealth in ways they simply could not duplicate today. Two -- including Raymond Minella (above) -- were high-ranking dealmakers at investment banks; another two seized prominence as corporate raiders. The others are the founder of what was one of the fastest-growing real estate brokerage firms in the U.S., an arbitrager who specializes in the securities of bankrupt companies, and an all-but-forgotten stock market prognosticator. Expert players at games that have since gone out of style, all are smart enough to see the need for real change. What happens on and about Wall Street, of course, is far from typical of America. Many who missed out on the megabucks during the 1980s delight that - some highflying financiers are crashing especially hard. The securities industry, which employed 260,000 at its 1987 peak, has since eliminated 45,000 jobs -- and with a bear market under way, the carnage is far from over. Mergers are down 50% from last year's already depressed levels. The junk bond business, which once financed American excess, is comatose and barely twitching. But the experiences of these seven men -- and their strategies for the 1990s -- reach beyond Wall Street to such common management concerns as employee relations, compensation -- and even the work ethic. The momentum that carried so many so high during the 1980s -- the wave -- just isn't there. Here are the stories of some who surfed the big kahuna.

SHAFTED BY MERRILL LYNCH, RAY MINELLA STARTS OVER Co-founder of Merrill Lynch's merchant banking business, Ray Minella, 41, is a junk bond specialist whose operation earned an estimated $600 million from 1985 to 1989, some 30% of Merrill's total operating profit for those years. Despite this performance -- which included a $100 million fee on the RJR Nabisco buyout -- the firm disbanded Minella's department last spring when its revenues plunged. Says he: ''I thought the decision was wrong. Your clients remember whether you're with them in the bad times.'' Spurning an offer to run another department, Minella quit in July. Don't feel too sorry for him. Minella, who reportedly made $5 million a year, spent August golfing and fishing at his ten-acre spread in Jackson Hole, Wyoming. In September he talked to business contacts about his next move, and then decided to form an investment banking boutique called Berenson Minella & Co. that will offer financial and strategic advice to corporations. His partner is Jeffrey Berenson, 40, Merrill's other former co-chief of merchant banking, who also quit. Says Minella: ''There's a lot of dislocation now, which makes it a great time to start a business.'' His life was not always so cushy. His father died two weeks before Minella was born. He left home at 15, after his mother remarried, and worked his way through Berkeley, Cornell law, and the Wharton MBA program. When he joined Merrill as an investment-banking associate in 1976, his salary was $21,000. Asked by a Merrill interviewer what made him tick, Minella remembers his reply: ''I said that ever since I was 10, I'd felt my father's early death was unfair. I believed that the only way to make his life matter was to make my life matter.'' Minella's lucky break was a series of assignments for troubled clients, including Eastern Air Lines, that gave him an early education in junk bonds. ''From 1982 until the market crash in 1987, it was hard not to make money by buying companies and breaking them up,'' he says. But those deals depended on junk bonds, and Drexel Burnham Lambert dominated that area: No other firm had the clout to credibly commit billions on a few days' notice. Deciding to buy their way into the business, Minella and Berenson induced Merrill to lend its own capital to clients as bridge loans. ''I knew all this dealmaking was a money machine because it was self- reinforcing,'' says Minella. ''As more companies sold at huge prices, more were put up for sale, and more money became available.''

Of course, that self-reinforcing cycle became the junk market's undoing, as the too-ready availability of financing allowed acquisition prices to reach insane heights. ''Almost every leveraged buyout from late 1988 on was a disaster,'' says Minella, who backed his share of them. ''Money was too easy to get in the 1980s. Companies could do LBOs even when their annual cash flows barely exceeded interest costs. In retrospect, that was foolish.'' At the time, however, he couldn't push the financial realities too hard -- clients would just go someplace else. Says Minella: ''We made a lot of money for a lot of people, but the bad deals will always bother me.'' Minella believes that there is more to be made in creating order out of the chaos of the last decade. ''Many of the capital structures created in the 1980s will have to be restructured in the 1990s,'' he says. ''This is the time to buy, when there's blood in the streets.''

THE ARB: A FLY ON THE WALL ''I make no bones about it. I was a lucky guy who happened to be in the right place at the right time,'' says Thomas Kempner Jr., 37. Since 1984 he has been one of four partners at M.H. Davidson & Co., a small New York City arbitrage firm that has made a 3% profit this year while the arbitrage industry has lost about $1 billion. Kempner specializes in bankrupt companies. Says he: ''If I compare my situation with the real world, I guess I've always been overpaid.'' He doesn't feel guilty. ''My attitude is that we're just part of the market. We don't know yet how our pay will average out over a 30-year period.'' As more of his Wall Street friends find themselves out of work and often deeply in debt, Kempner is even more aware of his good fortune. ''It's getting very tough out there,'' he says. ''This is a game of musical chairs, and they're taking the chairs away.'' Lean and fit from bicycle racing, Kempner seems as secure as an arb can expect to be. In the early Eighties he became a specialist at trading the securities of bankrupt companies. He started by investing in distressed ones, particularly utilities with nuclear plants. One such buy was Consumers Power of Michigan, which is now healthy. He held its bonds for three years for a 50% annual return. ''That was a big score,'' says Kempner. Since he joined Davidson, Kempner's trades have produced roughly half the firm's profits. Of Davidson's $43 million equity capital, FORTUNE estimates that $5 million is Kempner's. ''I think of it as a fantastic savings account,'' he says. ''But I don't take home enough money to go wild and crazy in spending.'' Is money an objective? ''I'd say I'm as ambitious as the next guy.'' He absolves most arbs of responsibility for what went wrong in the Eighties: ''The industry had some very visible characters who went to jail, such as Boesky. But for the most part, arbs did not cause the excesses. They were the flies on the wall, trying to profit from them.'' Kempner has spent most of his life among Wall Streeters. His father, Tom Sr., was a partner at Loeb Rhoades, a brokerage house that Shearson bought in 1979. After Choate, Yale, and Harvard business school, Tom Jr. joined Goldman Sachs in 1978 as a bond trader. Kempner's B-school peers thought little of his decision to become a trader -- they saw corporate finance as the sexier side of investment banking -- but, says he: ''My father helped explain to me why trading would be a good choice.'' The son left a few years later because he wanted to work at smaller firms where he would have a better chance to stand out. Among them: First City Capital, a trading firm owned by Canada's billionaire Belzberg family, where he ran a $50 million arbitrage pool. Then he signed on at Davidson. ''I never thought the boom of the 1980s would last as long as it did,'' says Kempner. ''If I'd been really clever I'd have borrowed a lot of money and bought more of what I bought. But I figured that if everybody on Wall Street came to work at a great salary and their incomes all grew at 50% compounded, it wouldn't be long before the entire personal income of the U.S. would be concentrated in one industry. There are Newtonian forces that work against that.'' Kempner's bankruptcy business brings him nose to nose with the biggest disasters in American commerce, a few of which have rubbed off on him: Earlier this year, he says, he lost $350,000 on a five-month play in bonds of Southland Corp., owner of 7-Eleven stores. A big 1990 win: $500,000 from Allegheny International bonds, which he held for six months. Of bankrupt companies in general, he says, ''Many are there because of somebody's greed.'' The worst is yet to come, says Kempner. ''It's a terrible environment. If the 1980s was like riding with a strong tail wind, the 1990s is like riding into the wind. Some very major returns are going to be made in bankruptcies. The opportunities are getting bigger every day, as more people get worn out. But the market is much crueler now, and I don't think we're at the bottom yet.''

A FALLEN PROGNOSTICATOR PLANS HIS NEXT STEPS Robert Prechter, 41, is a market analyst who won fame and even adulation for predicting the jigs and jags of the late lamented bull market. His forecasts, based on an arcane, mathematically complex theory of human behavior called the Elliott Wave Principle, proved so accurate that some believed they moved markets. But even though he issued a mild sell advisory early on October 5, 1987, Prechter failed to call the October 17 crash. He became an instant has- been. Prechter still publishes his monthly Elliott Wave Theorist newsletter from Gainesville, Georgia, but the number of subscribers, who pay $233 a year, has declined substantially. He remains an ardent devotee of the wave principle, developed in the 1930s by an accountant who first became ill and then lost his shirt in stocks. At its simplest, the theory holds that all human progress follows the predictable pattern of three steps forward, two steps back. ''I know the incredible value of the wave principle,'' says Prechter, a Yale psychology graduate who spent four years as a rock-and-roll drummer. ''I use it not just in market timing but also in timing my professional and personal moves. I think anyone who ignores it does so at his peril.'' The peril Prechter foresees is a depression deep enough to drag the Dow Jones industrial average down to 400, one-sixth of its recent level. ''I think I know to the month when the bottom will come,'' he says. ''It's at least two years from now, but I won't say exactly when. It's not a good idea to be the figurehead for a bear market. Sometimes they shoot the messenger.'' Prechter has kept his own money safely invested in T-bills since shortly before the crash. ''I didn't predict the crash because I didn't know it would happen,'' says he. ''This is strictly a probability game. If I'm right two out of three times, I'm still ahead. But I did put out a sell, so our money was on the sidelines.'' Still, his sudden fall from grace -- which some thought well deserved -- proved painful. Says Prechter: ''I enjoyed the prominence. Even though I knew from wave theory that a change was coming, it was still pretty hard to take emotionally.'' His response has been to lay low and prepare for the next bull market. ''The good news really comes at the bottom, when everyone's gloomy,'' he says. Among the new products Prechter is preparing for his own next three steps forward are a $1,500 set of videotaped lectures and several more newsletters, including The Capital Preservation Strategist, which pitches lowbrow doom and gloom. He expects extreme deflation. ''It's happening in real estate already,'' he notes. In a few years, he thinks, there will be land and other investments for sale at a small percentage of their peak prices.

IRWIN JACOBS: NO MORE MR. NASTY GUY A raider who says he has reformed, Irwin Jacobs, 49, is trying to raise a $1 billion investment fund that will capitalize on the mistakes others made during the past decade. Among his targets: companies that are entering the 1990s owing more interest than they can pay. ''I'm against much of what happened in the 1980s,'' says the Minneapolis investor. ''This country put billions of dollars in the hands of people who had no idea what they were doing, from Charles Keating on down ((Keating is accused of looting California's Lincoln S&L)). The greed and inefficiency turned out to be worse than what we had before. It just nauseates me. Now the ones who can't get their acts together are going to be vulnerable to people such as myself.''

Jacobs, who finds no fault in his own behavior, promises one major difference in his strategy this time around: no unfriendly deals. ''I don't want to waste time on litigation anymore,'' he explains. ''Looking back, there was a real lack of return on the dollars we all spent fighting each other.'' The son of a junkyard operator, Jacobs bought large positions in companies that he never did take over. But his presence often put companies in play < -- or promised to -- and drove up share prices. His targets included Pabst Brewing (he sold his stake for a $20 million profit, he says), Kaiser Steel ($32 million), Walt Disney ($32 million), and ITT ($20 million). Along the way Jacobs also bought some companies, including Bekins, the moving outfit ($92 million), and AMF, a manufacturer of leisure-time products ($545 million). Like most raiders, Jacobs sold off enough assets to recover his purchase price, then made his profits out of whatever remained. Jacobs's flagship corporation: Minstar, a pleasure-boat producer that was sinking when he bought control in 1982. He took it private in 1988 and still uses the company to make acquisitions. ''When I was going through the Eighties, I believed everything I was doing was right,'' says Jacobs. ''I believed very strongly in the shakeup of the system -- that those managers and their boards were so irresponsible that the system was not functioning properly.'' That's what every raider, from T. Boone Pickens Jr. to Carl Icahn, used to say. But these days Jacobs is starting to sound like a member of the Business Roundtable: ''I still believe shareholders should have the last say. But even shareholders have to be accountable to something beyond their own pocketbooks. We all have to make money, but at the same time we do have responsibilities to our community, to our country, and to the world.'' Jacobs even has kind words for some corporate managers he used to deride. For example, his corporate neighbor General Mills ''is one of best-run companies in world today,'' says Jacobs. ''Back in the 1980s, the same managers who are running it now looked like idiots. Some of these guys who are doing good jobs today learned from the threat of takeovers: They made some hard decisions. They are the true beneficiaries of the 1980s.''

BAD NEWS OUT THERE FOR LITTLE BUMPKINS ''I felt estranged during the last decade,'' says Peter Goodson, 48, a gangling, frequently grinning supersalesman who spent most of the Eighties running Kidder Peabody's mergers and acquisitions department. Never the gunslinging type, Goodson led his department into niche businesses, such as corporate defense; though successful at that, Kidder never ranked among Wall Street's top investment banks in M&A. He put together the 1986 deal in which General Electric bought 80% of Kidder for $600 million, and spent the next three years trying to help GE invest its own capital in Kidder deals, such as the Montgomery Ward LBO. Then he quit to become one of eight principals at Clayton & Dubilier, a leveraged-buyout firm. Says he: ''After working as an obstetrician for 20 years, I decided I'd rather be a parent.'' Goodson grew up poor in sunny Southern California. After graduating from Stanford, he went into partnership with an inventor of rolling platforms for hard-to-move appliances such as refrigerators. He expanded the business and two years later sold it for about $1 million. Unsure what to do with his money, he decided to become a stockbroker to learn about investing. Kidder hired him, but moved him to investment banking. Operating at the quaking epicenter of finance, Kidder's M&A business grew from less than $1 million a year in the late 1970s to a peak of $200 million in 1986. Then Martin Siegel, Kidder's top tender-defense specialist, wounded the firm by moving to Drexel. Far worse, Siegel subsequently admitted that he had been insider-trading with Ivan Boesky for years. That news, coming soon after GE bought Kidder, soured relations between the two companies. ''It was a devastating experience,'' says Goodson, who worked closely with Siegel, though never as his boss. Goodson says he felt profoundly betrayed. He was also disturbed that younger investment bankers, including some of Kidder's, were losing interest in their clients. ''Whether a transaction was good or not was of no importance to many advisers,'' he remembers. ''Like everyone else, we had people coming straight out of business school whose goal was to make lot of money and then display it. I gave my people the same speech every year: 'At some point you're going to need your clients more than they need you.' But I could never tell them when that would happen.'' The subordinates, however, had other priorities. ''If you gave those kids a 20% increase at the end of the year they looked like you'd wounded them. They all expected 30% or 40%. Somewhere out there is some bad news for those little bumpkins.'' Now, Goodson says, many of his former associates can't face up to how badly market changes have damaged their prospects: ''I see a lot of denial. I have the sense that many of them lived on credit. Now they're unduly optimistic, saying that everything will be just like before in another six months. I think the fundamentals have changed, especially in M&A. This generation of investment bankers won't ever experience those highs again.'' Goodson expects a recession, accompanied by tight credit, that will last for at least 18 months. Still, he believes his new employer can continue to prosper in LBOs. Having raised $1.2 billion in equity capital, Clayton & Dubilier recently was negotiating a $2 billion deal to buy controlling interests in several of IBM's business-equipment lines, including laser printers and PC keyboards.

Unlike some LBO houses, Clayton & Dubilier does not rely primarily on financial hocus-pocus to produce its returns, which averaged nearly 120% annually during the 1980s. The firm trades on the management expertise of its partners, including Charles Ames, 64, former CEO of Reliance Electric, Acme- Cleveland, and Uniroyal Goodrich Tire. Goodson makes no claims to be a management genius himself: ''I'm here to carry Charlie's bags and see if I can learn something.'' What he does know is finance: ''The main thing we're seeing is a capital shortage. That means smaller deals, less competition, and lower prices. In just the last six months prices have dropped by one-third. You have to put in twice as much equity now: 20% to 30% of the purchase price is the rule of thumb today,'' he says. And what lies ahead? ''Private placements are going to come back as the main source of financing, which means a return to the restrictive debt covenants that junk bonds allowed buyers to avoid. The buyout business is hard work these days -- as it used to be and always should have been. The days of selling companies like slabs of meat are over.'' It's about time.

BIG DEALS WILL BE BACK IN A COUPLE OF YEARS The cerebral Sam Heyman, 51, never seemed like the raider type. A former federal prosecutor whose manner is unrelentingly soft-spoken and dispassionate, he has proved an able chief executive: Since seizing control of chemical producer GAF in a 1983 proxy fight, he has increased operating earnings every quarter. He has always been careful to take advantage of the times, however. GAF's unsuccessful attempts to buy chemical giants Union Carbide and Borg-Warner produced windfall profits totaling $350 million from appreciation in the price of their shares. And when he took GAF private last year, he paid just $43 million for his 85% equity stake in the $1.4 billion LBO. Asked why he invested so little, Heyman says, ''We were not anxious to invest any more cash than was required.'' Heyman isn't worried by anything he sees coming. ''While the economy is in for some turbulence in the next year, current bearish sentiment is in my view greatly overdone.'' He also sees advantage in GAF's high leverage: ''It tends to operate as a helpful discipline.'' He already has retired most of its junk bonds, largely by selling its surfactants chemical business to a partnership controlled by France's Rhone-Poulenc for $480 million. He plans to spend the recession cutting costs to whittle down the company's remaining $1 billion of long-term debt while increasing profits. Then, in what he predicts will be a resurgent economy, he may try again to buy another large chemical company. This is a man who gives the impression of knowing exactly what he's doing. A collector of modern art who is married to a Yale-trained lawyer, Heyman detoured around most of the pitfalls he encountered during the 1980s. ''Being essentially value-oriented, I think we showed restraint when acquisition prices became inflated beyond all reason.'' Soaring asking prices helped him resist temptation. After the Bhopal disaster, for example, GAF bought $355 million of Union Carbide's depressed stock on margin. Then Drexel Burnham's Mike Milken rolled in the big guns, committing $4 billion of financing for GAF to take over the entire company. Heyman's top offer: $78 a share, or $5.2 billion. Carbide countered with an $85-a-share package for 56% of its stock. Milken urged Heyman to raise GAF's offer, and said more financing was available. Heyman balked. ''While Mike Milken was a financier par excellence, we were not relying upon him to determine the values at Union Carbide. That was our job.'' GAF sold its Carbide holdings for a $268 million profit, instantly doubling GAF's net worth. (After two mistrials, GAF's vice chairman, James Sherwin, was found guilty of manipulating the market in Carbide shares. Heyman was never accused of wrongdoing, and Sherwin is appealing the verdict.) Heyman declines to comment on the Milken or Sherwin case. By 1987 every crackpot in America seemed to be planning to buy a FORTUNE 500 corporation, and stock prices rose to meet the demand. Instead of pursuing another chemical company, Heyman decided to take GAF private. His initial offer, in September 1987, was $66.50 a share, or more than $2 billion. GAF's board of directors pushed for more -- but instead, on the eve of the stock market crash, Heyman abruptly terminated his offer. ''With the benefit of hindsight, our initial offering price was simply too high,'' he says. Eighteen months later Heyman completed the leveraged buyout for $53 a share. The stock Heyman tendered to the LBO brought him $125 million in profits, and his stake in the private company could be worth far more than that if GAF continues to do well. Heyman expects the deal market to recover in a few years. Says he: ''While we will never again see the excessive leverage so commonplace in the 1980s, there will be takeovers, albeit more conservatively financed with more equity capital.''

THE REALTOR IS HAPPIER DOWN IN THE DIRT ''Sure, I was carried away during the 1980s,'' says William Raveis, 45, a former systems analyst who created Connecticut's largest real estate brokerage. ''We all got a little infatuated with the money. But what happened to me in those years was not fun -- it was all pretense.'' Raveis's ride was wilder than most. The son of a stonemason, he grew up middle-class in wealthy Fairfield, Connecticut, where he lugged his neighbors' golf clubs. At 26, after four years with Westinghouse, he bought a house in Fairfield -- and was struck by the agent's $1,800 commission. He got a real estate license through night school, took out a $2,000 consumer loan, quit his job, and opened a brokerage office over Mercurio's grocery store. Raveis was less interested in selling homes than in systematizing home selling. The competition was limited to what Raveis considered mom and pop operations -- but with just one office, he didn't have much to systematize. So he set out to expand. After two years, he opened a second office; by 1980 he had eight. Then came the boom. GTE, Xerox, and other FORTUNE 500 companies moved their headquarters to Fairfield County, bringing thousands of affluent employees with them. During the 1980s home prices there rose annually twice as fast as the national average. By 1990, Raveis had 47 offices, and says he controlled 10% of the state's real estate market. How did he get there? Systems! As Raveis explains: ''The problem in this industry is that no one knows who the heck the customer is. We created a computer system capable of monitoring all our customers, up to 40,000 people a year. The minute they walk in, we enter them in the system: I pay my receptionists $2 for every name. We find out what they want to buy, and then we funnel them to our branch offices.'' The systems worked beautifully. Raveis continues: ''A quarter of our prospects buy homes from us. When they sign a binder, all the bells go off and - their names get shot over to our other divisions'' -- businesses that brokered mortgages, insurance, and securities. ''Our hit ratio on mortgages was 70% of everyone we sold houses to.''

Raveis says he was making so much money he didn't know what to do with it. Then came the real estate market decline. The lesson he learned: ''You can work your keister off and do everything right, and then it can change on you really fast.'' Revenues dropped 10% in 1988, then another 20% last year. While sales slumped, costs continued to rise. Raveis expects to make $2 million in 1990 only because he is selling off most of his mortgage and insurance business. To cut costs he started axing executives, including his own sister. He has also revolutionized his relationships with his brokers, who are independent agents: He imposed what he calls ''profit-sharing overrides'' -- a euphemism for cuts -- on his brokers' commissions. In return he has promised his brokers every cent of profit the company earns beyond his 1991 target of $900,000. Explains Raveis: ''The market is going to be a bitch, and I need their help to pare expenses. During the 1980s I wanted to be commander-in- chief. But as a matter of fact it's more satisfying to say, 'Hey, I need help,' and then see everyone jumping on board. I climbed down from the mountaintop, and now I'm down in the dirt with everybody. That's where I started, and to tell the truth, I like it better there.''