Amateur Guru: Jack Barnes
2005 return: 82.7%
Age: 38
Hometown: Sacramento, Calif.
Day Job: former call center rep, who recently started a hedge fund
Online Fund: Extreme-Value Fund
Specialty: high-risk micro-cap stocks
Web site: www.Marketocracy.com

Before he started using Marketocracy, Jack Barnes was answering support calls for E-trade. His only investing experience was helping a friend who'd won a $100,000 insurance settlement with some stock research. However, in the summer of 2002, Barnes got serious. He put $5,000 into an E-trade account of his own, and he set up a virtual portfolio at Marketocracy to test his ideas. Since mid-2002, his "Extreme Value Fund" on Marketocracy has returned 612.5%. In fact, his three-year record has prompted him to begin investing professionally.

Barnes, 38, can thank the Internet for his success. Today Barnes has turned his online notoriety into a career. He claims $13 million under management--mostly in separately managed accounts. Barnes' investing strategy is to look for big-picture news and then find related stocks. And he likes them small, which means he dabbles in the riskiest part of the market.

From a macro standpoint, Barnes thinks oil could hit $90 per barrel in the next 90 days. He's also waiting for a supply shortage to shock prices up even more. Barnes is worried about American currency and moved into gold last spring. He's also been diversifying more of his investments into Canada of late. One recent buy is Canadian gold company Desert Sun Mining. Barnes likes that it controls 1.5-million acres of land with gold. The stock is already up more than 30% in 2006.

Amateur Guru: T.J. White
2005 Return: 77%
Age: 37
Hometown: Allen, Texas
Day Job: forklift operator who recently quit to invest full-time
Online Fund: Auminer's Energy
Specialty: "Blue collar" stocks with low price-to-earnings-growth ratios (PEGs)
Web site: www.Marketocracy.com

In many ways former Home Depot forklift operator T.J. White, 37, is a perfect example of the dangers of Web stock trading. In March 2000, just as the Internet-stock bubble was about to burst, White took $10,000 in savings and began to daytrade. "Everybody was talking about all the millionaires working at Home Depot," says White in reference to his employer's stock that quadrupled in the late 1990s.

Unfortunately for White, he lost his savings in a matter of months. However, instead of quitting investing altogether, he joined online stock-picking community Marketocracy.com, where investors trade virtual portfolios of $1 million.

Now White is among the top performers of the 60,000 online portfolios tracked by Marketocracy. His Auminer's Energy fund has gained 77% in 2005 and an annualized 37.9% over the past three years. Like Fidelity Magellan investment guru Peter Lynch, White looks for PEGs of below 0.5 and then waits for the ratios to move to 1.0. Translation: He buys stocks that are trading at a discount to their expected earnings growth and then sells when those stocks become fully valued to expected earnings.

Among stocks with low PEGs, White only buys companies that currently have positive earnings. "Anyone can say they're going to be profitable next year," he says. And he favors stocks with higher growth rates. "Even with the same PEG, if you have a stock with a high growth rate, it's certainly going to grow faster than a stock with a low growth rate."

Right now, White likes the energy sector: "I found out I do best in the blue-collar fields, materials, energy and industrials. And I don't do very well in health care, financials and infotech." His investing success allowed him to quit his forklift-operator job this year. He says he started 2005 with $60,000 in investments and has more than doubled his money, giving him the confidence to invest full time. In fact, he says, he just sent a withholding check to the IRS for about the same amount that used to be his annual salary.

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