The King of Natural Gas

You could hear John Arnold trying to choose his words carefully. Seated at a conference table inside a drab government building in Washington, D.C., in August, Arnold hardly fit the stereotype of a swaggering, 35-year-old billionaire natural-gas trader. He stuttered a bit before he gained momentum and politely advocated rules that would restrict others while allowing him to keep doing what he does. It was a rare public appearance for one of the least-known billionaires in the U.S. But the stakes were high. Arnold was testifying at a hearing of the Commodity Futures Trading Commission (CFTC). Arnold would tell you--if he were inclined to tell you anything (and he rarely is)--that he's a speculator. He might say, though, that that's not a bad thing to be. But call him what you want--nobody has profited more when it comes to natural-gas trading in recent years. His Houston-based hedge fund, Centaurus Energy, which manages more than $5 billion in assets, has never returned less than 50% in seven years of business. But now he faces the biggest test of his career. His mojo relies on his ability to make enormous bets. The CFTC, however, has vowed to impose trading limits that would target the industry's largest players.