As boom turned to gloom, some gamblers with good timing made a fortune. Will they also know when to take their bets off?
Earlier this year Prem Watsa, the gunslinging chief of Fairfax Financial (nyse: FFH - news - people ), had $341 million riding on a hunch that dozens of brokers, banks and insurers could struggle paying their debts. Watsa has a history of making a killing on bearish bets. He sold half the company's stock holdings before the 1987 crash and bought puts against the S&P 500 before the index fell in 2000. But as summer began, his latest wager had produced nothing but losses.
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