Can He Recoup?

It's early October, and Richard E. Rainwater should be in dealmaking heaven. The stock market has just wrapped up its worst three-month performance in eight years. Investors are worrying about hedge-fund losses, emerging-market collapses, even a U.S. recession. For an investor like Rainwater, it's a classic opportunity. A teenage Texas drag racer turned Wall Street legend, he built a billion-dollar-plus fortune by buying into beleaguered businesses at discount prices, sometimes cutting four or five deals over several phone lines simultaneously.

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