Stockpickr: The Top 10 Hedge Fund Managers

2. Jim Simons, Renaissance Technologies

Jim Simons of Renaissance Technologies, whom I've written about many times in the past, made an estimated $1.5 billion to $2 billion for himself last year. You can check out Renaissance Technologies' page on Stockpickr for some of his top holdings and to see which positions we feel are the fund's long-term holdings.

My theory has been that Renaissance has been loading up on companies with huge cash positions and little debt. Renaissance is a quant-oriented shop that has probably determined that these are the types of companies that outperform over the long run because they have little risk of going out of business due to their large cash positions. Examples from his portfolio are Merck(MRK Quote) and Lockheed Martin(LMT Quote).

3. Eddie Lampert, ESL Investments

Eddie Lampert from ESL Investments ranks third, with an income estimated at $1 billion to $1.5 billion. Lampert follows the classic Warren Buffett technique: Take over a company with large cash flows and start allocating that money. Eventually, if you are a good allocator the best use of capital will be your investments rather than building out new stores.

Besides Sears Holdings (SHLD Quote), Lampert is also big in AutoZone(AZO Quote) and AutoNation(AN Quote). To see his holdings, check out Lampert's page on Stockpickr.

4. T. Boone Pickens, BP Capital

T. Boone Pickens, who was No. 1 on the list in 2005 with income of $1.5 billion, ranked No. 4 in 2006 with an estimated income of $1 billion to $1.5 billion. Pickens is the master of peak oil theory, the idea that the world is eventually going to run out of oil. So he loads up on stocks that are likely to benefit from this anticipated decline in supply.