The baby-faced billionaire started as a numbers whiz on the natural-gas desk at Enron, emerged from that disaster to start his own fund in 2002 at age 28, and last year turned in the third-best hedge fund performance, after John Paulson and James Simons, who is retiring. Since starting his fund, Arnold has returned at least 80% every year -- including reported gains of over 200% in 2007, when he took the short side of Amaranth's disastrous bet on natural gas.

Next big thing: He's spending $100 million to build new natural-gas storage caverns, making him a key middleman in the energy economy.

influential, interesting, 40 under 40 (2009),