Ken Kam is a longtime mutual fund manager who came up with an innovative way to manage money about five years ago. He created the site Marketocracy.com, an online community where investors are invited to join and create portfolios, which are tracked publicly. He then takes the picks of the top 100 performers and sticks them in the mutual fund he manages (this is simplifying a bit, but you get the idea).

The Marketocracy Masters 100 Fund (MOFQX) has outperformed the S&P 500 the past two years, but did pretty poorly in 2004. Morningstar gives it just one star, but Kam is looking forward to its five-year anniversary when he says its returns will be more than double the S&P 500 over that time.

What I find fascinating about Kam's business model is that the community at Marketocracy has become Kam's own research pool. When he has an idea, he tests it against members. When he's looking for new ideas, he checks to see what the top-performing managers on the site are buying. (Premium members get to do the same thing).

This year Kam started his Best Ideas Blog. There he posts about companies he considers, well, his best ideas. His site charges subscription fees for full access to newsletters, forums and the blog. But he shared some of his ideas during a recent visit to AOL's offices.

Kam's current best ideas:

Elan Corporation ADS (NYSE: ELN) This Irish biotech firm got slammed when its multiple sclerosis drug Tysabri was withdrawn from the market in 2005 after causing fatal complications in a few patients. But the drug was reintroduced this summer, along with plenty of warnings about the risks. Kam's research found that many MS patients are willing to accept the risks of the drug in hopes of benefiting from the treatment. The stock, now at $16, has already doubled since he bought it and he thinks it can double again. It is the fund's largest holding.

Valero Energy (NYSE: VLO) This oil refining stock has taken it on the chin lately as oil prices have fallen and investors have sold off energy stocks. But Kam thinks that Valero will benefit from lower crude prices. Crude is the raw material used in refining gasoline, so Valero's costs will come down and profit margins should rise thanks to lower crude. Plus, as gasoline prices fall, demand for gasoline should rise creating more need for refining services. Given that the refining capacity shortage is not going away anytime soon, "we think Valero is a screaming buy right now," says Kam.

US Global Investors (Nasdaq: GROW) A mutual fund firm with top-performing natural resources and precious metals funds, US Global Investors is enjoying a surge of new assets under management -- which translates into growing revenues. The firm's expenses don't rise that much as new funds come in, so earnings are rising even faster than revenues, says Kam. He expects those trends to continue long term and benefit the stock.

InfoSonics Corp. (Nasdaq: IFON) Based in San Diego, InfoSonics distributes cell phones and accessories in Central America. Kam says it is a play on growth of wireless in Latin America. But he thinks it is a great buy now because new accounting rules for expensing stock options make its reported earnings look much lower than they actually are. "It's hard to figure out what the earnings really are and that creates opportunity if you're willing to really dig in," says Kam.