Stockpickr: The Top 10 Hedge Fund Managers

Trader Monthly magazine has released its list of the top hedge fund managers ranked by how much money each made personally in 2006.

Let me just state right off the bat that I'm jealous. And how can you not be jealous of anybody who makes $1.5 billion, as John Arnold of Centaurus Energy did last year? It does make me feel better realizing he's probably going to pay about 50% in taxes, so the take-home figure is likely around $750 million. But still.

It's worth noting that most, if not all, of the managers on the list made it because they are the best investors. Interestingly, most of them are long-term investors whose positions we can follow and potentially piggyback.

(Just as a footnote, when we began brainstorming the idea of Stockpickr.com, we considered creating a closed-end fund based on piggybacking the top two to top five positions of each top hedge fund. I still believe it's an interesting idea -- in other words, I would invest in it. But we focused our efforts on creating Stockpickr.com instead.)

1. John Arnold, Centaurus Energy

The No. 1 manager, John Arnold, offers a tricky model to follow because he trades only energy futures, and my guess is he's a very short-term trader. A guy such as Arnold probably takes huge risks. So far, so good -- those risks have been working out for him. But we don't necessarily want to emulate him, because his strategy can blow up, as super hedge fund Amaranth did last year.

Let's take a look at the other managers in the top 10.