(FORTUNE Magazine) – Every few weeks last fall, a shifting array of Dan Zanger's friends would gather in the basement of his Los Angeles home. They weren't there for chitchat, however, or to watch the game. They were there to witness a performance--and to learn.

For a few hours at a time, anywhere from three to five buddies would sit rapt in the darkened room, with windows shuttered to keep out the light, trying to glean the secrets of an artist at work. His blond hair as rumpled as his casual clothes, Zanger sat in front of five computer screens like a rock keyboardist surrounded by synthesizers. His body would tense as his eyes darted over the scrolling list of 800 stocks that he follows. Every so often, with the flick of a finger, he'd enter a buy or sell order.

Zanger would concentrate so hard that he didn't notice when spectators came and went. He wouldn't hear the questions they called to him. "I'm like a surgeon going in to do an operation," says Zanger. "I'm totally focused."

It's no wonder his friends and neighbors were curious. Just three years ago, Zanger, 47, was paying his bills by working in Beverly Hills as a swimming pool contractor, building Hefner-worthy tropical fantasy pools for rich and famous clients. In a good year he could make $50,000. Since then his investing, Zanger says, has turned $11,000 in savings into $18 million. That's a gain of 164,000%. "As far as I know," he exults, "it's the world record."

Talk about any recent investing trend, and Zanger will tell you he was one step ahead of the market. "I foretold the biotech move two or three months ahead of time," he says. And those other investors who got whipsawed by the rapid turnaround in Internet stocks? Not Zanger. He says he was short-selling those stocks. Referring to a prediction he made in an investing newsletter that he began publishing last year, Zanger adds, "I showed everybody the market top of March 10."

Yeah, yeah, yeah. We've all met a Dan Zanger--or 20. You know whom we're talking about: the guy at work who won't shut up about how he's whipping every fund manager on the planet with his tech portfolio. The golf buddy who can't stop droning on about the excruciatingly obscure--but incredibly lucrative--options scenarios he picked up from a $25 book. Or your neighbor's 21-year-old kid who, to hear his parents tell it, has made enough in the market to pay for their retirement.

The only difference? Zanger appears to be telling the truth. His 1999 tax return and trading records, which he shared with FORTUNE, show capital gains of $14,232,878.

Zanger is rare, but he's not alone. We undertook to locate members of a very unusual breed: individual investors who chalked up out-of-the-ballpark returns--and were willing to prove it with tax or trading records. Though no one was able to equal Zanger's universe-beating numbers, we did find a tiny, scattered tribe of investors with the kind of results that entitle them to all the cocktail-party bragging they want to indulge in. Our not-so-motley selection includes everyone from a stay-at-home dad to a personal trainer. Their investing styles couldn't be more different, though they usually combine an Olympian tolerance for risk with a penchant for unorthodox strategies that involve charts, options, margin, and the like--not to mention insane luck. They all have one thing in common: They are hands-down, no two ways about it, making mincemeat out of all those highly paid pros.

By definition, most of us can't beat the market averages. But since investing became America's most popular participatory sport in the '90s, outperforming Wall Street wisemen has become a national obsession. It's the quintessential American myth--Anybody can make it big--reincarnated for the new millennium. And like any compelling myth, it requires a handful of unlikely individuals to keep us convinced that, yes, a muscle-bound personal trainer can outinvest a hedge-fund manager with billions of dollars in his portfolio. It's a tale Horatio Alger might have penned--if he had known a world with discount brokers and online investing.

So what's Zanger's secret? The former pool contractor, who resembles a poor man's--er, a rich man's--Richard Branson, was always more than happy to explain his secrets to his friends once the market closed. He would become animated, describing to his awed flock why he bought, say, 1,000 shares of AskJeeves.com at the precise moment he did. The stock, he'd tell them, was clearly headed into a "pennant" formation--it had risen and then tapered off quickly--and thus seemed primed for another quick, steep increase.

His friends would look on in glassy-eyed bewilderment as he explained his "technical" investing philosophy. It's not exactly a strategy that would make Warren Buffett proud. Zanger completely ignores yardsticks such as price-earnings ratios and revenue growth. The only thing he cares about is how a stock is behaving. "I trade whatever the market is going to push up the most," Zanger says. "It doesn't matter what the company does, or what their earnings are." Devotees of technical analysis believe that stock prices move in easily recognizable visual patterns that an experienced investor can capitalize on. So when CMGI is gearing up to a "cup and handle," or Amazon is perilously close to a "descending triangle," or--egad--"channel formation," Zanger moves. He internalizes those curves, those spikes, like a doctor scrutinizing a heart patient's monitor in an intensive-care unit. "Stocks are my buddies," Zanger says. "I know when they feel good or when they feel bad."

At the beginning of November last year, Zanger noticed that Qualcomm's stock was acting "a little frisky." So he dove in, buying 5,000 shares on the way up from a split-adjusted $57.50 to $62.50. In a matter of weeks the stock was trading as high as $93 but was incredibly volatile. Zanger hung on, buying and selling parts of his position on dips and spikes. By Dec. 30 the price had leaped past $161. On the first day of the New Year the stock jumped a bit more, and Zanger unloaded his remaining positions at $196 and $194 for a profit of $2.7 million. How did he know to sell near the very peak? "It was clearly in a massive parabolic blowoff top," says Zanger. Obviously.

This spring, Zanger says, he moved most of his assets into cash, shielding him from the tech meltdown. There the money will remain until his charts tell him the worst is over. While he waits for that to happen, Zanger is busy preparing to raze the home he recently bought in Kirkland, Wash. He plans to replace it with a dwelling modeled on Frank Lloyd Wright's Falling Water. "You should see the pool it's going to have," he swoons. As for the building of his mini-empire, Zanger is unequivocal: "It's the greatest story ever told."

Brent McKinney of Olympia, Wash., has a similar story to tell, though it's a lot harder to drag it out of him. Until last year, the sandy-haired 35-year-old slaved away selling desks and beds to colleges and other institutions. These days he's living better than he ever imagined on his trading income and is a stay-at-home dad (his son, Henry, is 18 months old). He and his wife, a bank teller, are expecting another child and plan to break ground on a new house during the next few months.

He may not be given to bragging, but McKinney never misses an opportunity to tell others how good it feels to leave the work force. In late October he took the afternoon to visit an old friend who had recently moved to town to start his own business, building porcelain teeth and bridges for dental work. The two had been high school classmates in East Wenatchee, Wash., rivals, even, for a spot on the basketball team (McKinney lost). As he toured the small office and heard his friend talk about the late nights, financial drain, and everyday stress of being an entrepreneur, McKinney smiled. Like the earnest host of a late-night you-too-can-be-rich infomercial, he turned to his friend. "You know," he said, lowering his voice conspiratorially, "I've made a ton of money in the market, and I stay home with my son all day and never work more than five or six hours." Incredulous, the friend could only say, "Wow! That's fantastic! Are you serious?"

Yes! And all it takes is a few simple hours of work a day! At least, that's how McKinney might describe it. During a typical day he stays glued to his three computer monitors, fixated on his flashing watch list of 60 or so stocks that are reaching new highs. McKinney is a classic momentum investor: He looks for tech and biotech names that are breaking out of trading ranges and--he hopes--soaring toward new highs, then places huge bets. He says he has been able to find enough appropriate candidates even during this year's extended tech-market swan dive. "First and foremost, you want to have the wind at your back," he observes. By buying stocks on the upswing (and immediately dumping any that are falling), he has scored time and time again. It's a dangerous game, but McKinney's hunches paid off with Yahoo, for example. Last fall he rode 1,100 shares from $82 to $115, cashing in a profit of $36,000.

That was only one of many hits. In just under four years, McKinney's tax returns and brokerage statements show that an initial lump sum of $18,000 saved from his furniture sales job has ballooned nearly 5,236%. Maybe he should have his own infomercial, after all.

Between bites from his Chinese food combination plate, Amin Virani stared intently at the screen of his laptop and typed in a few ticker symbols of the nearly 60 companies he follows. It was just after noon on a July day, and Virani, a 30-year-old software engineer in San Francisco, had plunked down in the food court in his downtown office building for a quick look at his portfolio via a wireless Internet connection. Virani is an avid investor. But with a demanding full-time job, he can trade his stocks only before work and during lunch.

As he typed in AMD, a smile creased his face. Advanced Micro Devices, the semiconductor manufacturer whose shares Virani had begun buying and selling in October 1999, was soaring. Virani had bought the stock on a contrarian hunch last year. It had been going nowhere because of supply problems and Y2K fears. But Virani bet that demand for chips would increase once corporations began buying new computer systems at the beginning of 2000. He also believed that AMD's biggest competitor, Intel, had underestimated demand and that AMD's flash-memory-chip business would ramp up with all the demand from wireless applications. Doing some quick calculations in his head, Virani realized that with the stock now trading around $80, he had made more than 400% on the investment. Soon after, hearing talk of a sector slowdown, he liquidated his position (a good thing--the stock tanked this fall).

If Dan Zanger's secret weapon is that stocks are his "buddies," then Virani's secret is his actual buddies: the network of Indian ex-pats that includes programmers, engineers, executives, and company masterminds at many of Silicon Valley's top companies. Virani's emphasis on actual information about the companies whose stock he's buying seems almost quaint compared with the approaches used by investors such as Zanger or McKinney. But it's effective. If Oracle software isn't living up to the buzz--or Conexant fax modem chip sets are getting snapped up by big customers--chances are, over Chinese food, via e-mail, or around the office, Virani will get wind of it.

This old-fashioned information gathering has paid off. Virani opened an IRA with $2,000 in April 1998, contributed another $2,000 a year later, and has traded actively in the meantime. By March his balance had soared to $145,000. Even after the big Nasdaq dropoff, Virani's holdings are up 3,150% to date.

Few can deliver quadruple-digit returns. But with more than a dollop of self-confidence, Wayne Chang is certain that no professional could come close to what he has generated. The revelation that he was the best-qualified person he knew to manage his money came more than three years ago--at the age of 18. As a freshman at the University of Pennsylvania's Wharton undergraduate business program, the slight, spiky-haired Taiwan native was already an avid student of the markets. When his parents sold a home in Vancouver and decided they wanted to invest the $500,000 proceeds, Chang persuaded them to let him manage the money. He chose a broad range of mutual funds, like Fidelity Growth & Income and Select Electronics, Vanguard's S&P 500 index fund, even a few international offerings for diversification. He added small positions in blue-chip tech companies like Microsoft and Intel.

But as fate would have it, the market took a dip, sinking all his domestic mutual funds. It wasn't long before his individual stocks were back on track, but something was wrong: "I slowly saw that the funds weren't recovering the losses--my [stock] picks were working out a lot better than the funds," says Chang.

That's when, as he describes it, "I decided to take matters into my own hands.... I came to think that mutual funds weren't very useful at all." He gradually shifted out of funds into stocks, spending hours a day researching companies from his dorm room. Somehow, he says, he managed to keep his grades up. (Though we asked to see his trading records, we didn't request a copy of his report card.) As the portfolio grew to more than $1 million by the end of his sophomore year, he and a friend chipped in for a Bloomberg machine and a traveling port that allows Chang to run stock screens from his laptop. The cost? Nearly the price of a year of college--more than $20,000 annually.

By March of this year, Chang's portfolio had exceeded $4 million. He had even received campus notoriety from local press accounts of his good fortune. With gains of 700% in three years, he was riding high. And then he went to Japan for a semester. Not realizing it would take more than a month to get Internet access, Chang bought the International Herald Tribune every morning and watched helplessly as his tech positions seemed to melt away in the spring conflagration. "Every day there was another headline: NASDAQ DROPS 200 POINTS!" he moans.

Since then he has managed to recoup some of his losses, and at last count his portfolio hovered around $2.5 million--a gain of 400% since he started investing. That far surpasses the 52.4% return that the average fund manager delivered during the same period, according to Morningstar. The sobering effects of the past six months have led Chang to temper his investing style. He still uses margin heavily, and options strategies, but instead of technology some of his latest bets are on surprisingly "dull" companies like PepsiCo and defense contractor General Dynamics. Says Chang, who plans to work on a Foreign Exchange trading desk when he graduates: "I thought about doing this full-time for myself...but I'm kind of excited to have a real job."

A.J. Lee, a personal trainer, is positioned behind a large barbell in a private basement gym in a lavish San Mateo, Calif., house, spotting his client, the CEO of a customer-management software company. Sweat beads off the 160-pound CEO's face as he struggles to bench-press the 275-pound weight. A few months back, when Lee's client was pumping iron several times a week, that weight was a tad easier. But these days the executive is traveling several times a week, working long hours at the office, and generally doing everything he can to keep his firm's stock price healthy amid the Nasdaq wreckage. But while ordinarily Lee might be irked that the exec is slacking on his gym routine, he is actually glad to see the man doesn't have time to work out.

Says the 34-year-old Lee: "That's why I have such a big position in the company--I know how hard this guy is working." Lee's teasing about the client's declining physical state prompted the CEO to joke recently, "It just goes to show you, A.J., I'm working a lot harder for you than you are for me!"

Lee, who trains numerous Silicon Valley executives who live in and around the wealthy towns of Woodside and San Mateo, caught the bug about a year and a half ago, almost by accident. Investing gave him something to discuss with clients during long intervals of stretching and weightlifting. He had purchased stocks before, but without much money to throw around he just couldn't seem to get enough leverage. Then one of his clients started talking about all the money he had made trading options. Lee was all ears. He ran out and bought at least eight options trading books, enrolled in a two-day seminar run by a company called Optionetics where he boned up on the basics, and then jumped in. Betting heavily on companies like Siebel Systems and Cisco Systems, Lee has adopted the vernacular of a hard-core trader.

"In March I did a calendar spread on Corning," he says, referring to the optical-networking company. "I bought ten contracts at a strike price of $150, then in April I started selling near-month contracts against it to finance the long contracts."

We won't even try to explain that one. Suffice it to say the trade, which spanned five months, turned $10,000 into $40,000.

Beyond his arcane options strategies, Lee's approach centers on the human touch. He says he gleans nuggets of information from CEO clients in between their huffs and puffs. He also gets the opportunity to take the leaders' measure--and sometimes ends up investing in their companies. "In seven months I'm up 200%," brags Lee (compared with 0.26% for the average fund manager during that period). "And I keep thinking to myself, With investing you keep learning more and more, and you keep getting better and better." Who knows? Next year at this time he could be a member of the 10,000% club. Especially if he listens to those "sell" signals. Thinking back to his slightly out-of-shape CEO client, Lee grins. "When he comes in looking depressed, really wanting to get back into shape, that's when I'll know to sell."

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