As the old folks say, it’s an ill wind that blows no good. The market havoc this year distressed millions, but to turnaround specialists like Arne Alsin, pain often brings healthy gain.

Alsin, head of Eugene, Oregon-based Alsin Capital Management, runs about $50 million for some 350 investors. He reviews more than 800 businesses each quarter, looking for troubled companies with turnaround potential. “There are two types of companies,” says Alsin. “Those with problems, and those that will have problems.”

Companies with well-publicized problems are generally discounted by Wall Street, Alsin says, because the Street tends to over-respond to both good and bad news. That tendency creates openings that smart investors can exploit, buying in while a stock is battered and riding it up as the company mends itself.

Assuming, of course, that it’s mendable. Alsin looks for what he calls “multiple levers,” or catalysts for success — new management, cost-cutting, revenue growth, margin expansion. “I’m not buying a stock based on one successful event,” he says.

Each year, Alsin lists the Top-10 Turnarounds he’s buying. In 2001, nine of the 10 stocks made money, including Hasbro Inc., which recently showed a 55 percent return, J.C. Penney (115 percent), and Office Depot (188 percent).

Alsin’s 2002 list was recently down about 3 percent — with the overall market down as much as 20 percent — but he remains optimistic. Noting the many reputable companies trading far below what earnings would dictate, he sums up this way: “That’s bargain time.”