Lehman Fires Elaine Garzarelli

Elaine Garzarelli, a prominent Wall Street stock strategist best known for calling the October, 1987, market crash, was fired by Lehman Bros. on Wednesday.

Garzarelli was dismissed because she and the research operation she led, which tracked the relative investment attraction of different industries and their stocks, had become too expensive, a Lehman official said.

Garzarelli, 42, who pulled down a seven-figure salary, did not return phone calls. She “left by mutual consent,” a Lehman spokeswoman said.

The ouster points out the difficulties of maintaining star status on Wall Street, especially as the securities industry tries to cut costs amid declining profits.

While Garzarelli’s 1987 market call and her subsequent research had earned her wide acclaim, in recent months she found herself at odds with Katherine Hensel, Lehman’s chief investment strategist. Garzarelli has been relatively bullish on the market, while Hensel has been cautious.

Also, a mutual fund Garzarelli had managed since 1987 was folded into another fund in August, in part because of disappointing long-term results.

In her tenure at Lehman, Garzarelli, a colorful speaker, had become a media darling. Last year, she even starred in commercials for pantyhose, chosen as the exemplar of a “real powerhouse woman on Wall Street,” an advertising executive said at the time.