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Speaker 1: Bloomberg Audio Studios, podcasts, radio news, plan, sitting by with

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Speaker 1: Thomas Petrophy of Interactive Brokers, and a lot of things

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Speaker 1: dominating the conversation, but none more than the next presidential administration.

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Speaker 1: When you think about what President elect Trump, who you

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Speaker 1: have given to for his prior campaign and the most

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Speaker 1: recent one, what do you think the most impactful change

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Speaker 1: will be to investors over the next four years.

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Speaker 2: Well, the most impactful aspect of the new administration will

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Speaker 2: be less regulation and less interference with private enterprise. Having

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Speaker 2: grown up in a socialist country, I've come to a

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Speaker 2: conviction earlier in my life that a free market economy

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Speaker 2: is the only way to efficiently run a society, and

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Speaker 2: so I'm very happy that this is the outcome that

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Speaker 2: we had this election time. I did not contribute as

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Speaker 2: much to President Trump as I did to other candidates,

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Speaker 2: other Republican candidates. I've always been a Republican all my life, because,

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Speaker 2: as I said, a good economy can only be based

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Speaker 2: on private entrepreneurship.

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Speaker 1: Speaking of the Republican Party beyond Trump, I am very

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Speaker 1: curious to hear what your thoughts are for Ron DeSantis

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Speaker 1: political future at the end of his term. As Florida governor.

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Speaker 1: Where do you think his career goes from here?

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Speaker 2: Well, unfortunately, I think round the centers shut himself in the.

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Speaker 3: Foot with this six week abortion.

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Speaker 2: Issue, and that I mean he could I don't know

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Speaker 2: if he will change his politics on that or not.

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Speaker 2: That is going to be a very difficult.

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Speaker 3: Situation.

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Speaker 2: I was a great supporter of run for many years

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Speaker 2: up until he came up with this six week abortion

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Speaker 2: thing because I don't believe in it.

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Speaker 3: I don't think it's a good thing.

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Speaker 1: Beyond round the scantis, who do you think he has

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Speaker 1: put up for the Senate see for Marco Rubio? Who

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Speaker 1: do you think takes that spot in Florida? Who would

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Speaker 1: you like to see take that spot? Who would you

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Speaker 1: be backing?

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Speaker 2: Well, I think rundiscientists would probably be the best candidate

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Speaker 2: for that Senate seat, and I hope that he will

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Speaker 2: do that rather than being Secretary of Defense, because I mean,

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Speaker 2: from a point of view of his political future, I

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Speaker 2: think a senatorial seat would be a better place to

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Speaker 2: jump off up than secretary of Defense.

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Speaker 1: What then, do you make of the reports that Lara

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Speaker 1: Trump is being put up for that Senate spot? Do

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Speaker 1: you think that she has a significant place there.

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Speaker 2: Well, she certainly has done a good job this time, Iran,

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Speaker 2: But I think she's I don't even know how she's

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Speaker 2: Is she old enough to become a senator? She must

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Speaker 2: be if they are talking about her, right, But I

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Speaker 2: think she's still a very young woman.

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Speaker 1: So you know, of course, are a very prominent Florida

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Speaker 1: resident yourself. Activity in Florida has been very heated, a

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Speaker 1: lot of people from Wall Street moving down there, and

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Speaker 1: of course with the president eleft at the Winter White House,

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Speaker 1: what has it been like there? Have you seen much

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Speaker 1: more increased activity, especially from the business community in what

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Speaker 1: is now known as Wall Street South.

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Speaker 2: Well, you see, it's actually from my point of view

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Speaker 2: because I live only three houses away from from mar Lago.

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Speaker 2: So many times I cannot get out of my house

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Speaker 2: because there are so many cars waiting in line that

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Speaker 2: it's very hard for me to go anywhere. So there

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Speaker 2: is a hell le a lot of traffic there. The

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Speaker 2: road is always closed up, and unfortunately, you know, these

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Speaker 2: assassination attempts are are very difficult to cope. So, yes,

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Speaker 2: it's not easy to live in Palm Beach nowadays.

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Speaker 1: You were talking earlier about the pro growth agenda, but

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Speaker 1: nothing to say yet of the tariff agenda. That is

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Speaker 1: something that has spooked a significant portion of the business community.

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Speaker 1: Do you think that if they are put on as

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Speaker 1: aggressively as had been postured during the campaign, that there

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Speaker 1: could be ramifications inflation that pervades the US economy.

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Speaker 2: Yes, it's certainly it's it's certainly possible. But I agree

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Speaker 2: with Trump that that is probably the best tool to

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Speaker 2: get to the point where eonan I get to. And

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Speaker 2: I think the opposite side will see that and we

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Speaker 2: will agree with it and they will.

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Speaker 1: Give in What does this all mean at the end

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Speaker 1: of the day for you at Interactive Brokers? If you

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Speaker 1: are looking at a pro growth agenda and stock markets

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Speaker 1: now record highs, another day of gains in the Nasdaq

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Speaker 1: one hundred, just soaring equities, what does it mean for

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Speaker 1: business for you, your clients and your ability to grow.

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Speaker 3: Well, it's extremely good for our business.

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Speaker 2: But I'm afraid that the markets are becoming over extended

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Speaker 2: and that you know, sometime in the future we will

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Speaker 2: have a downturn in the markets. But I don't think

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Speaker 2: it's going to be very violent and very far. It

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Speaker 2: will not go very far. So I'm extremely optimistic about

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Speaker 2: the next four years and maybe when thereafter.

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Speaker 1: What do you think this means for the potential to

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Speaker 1: grow inorganically? Have you considered mergers and acquisitions for interactive brokers?

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Speaker 3: Oh? For yeah, yes, yes we have.

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Speaker 2: It is it is difficult for us to engage in

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Speaker 2: any of that because most firms we look up that

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Speaker 2: we would we would buy are charging more for their

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Speaker 2: services than what we do, and they and they would

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Speaker 2: uh price themselves based on those revenues and incomes. And

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Speaker 2: of course if we were to take them over and

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Speaker 2: we reduce the charges to our level, then they those

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Speaker 2: profits would go down, so we we would we would

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Speaker 2: buy a firm that where they where. I don't think

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Speaker 2: that the that their cost reductions would be equally at

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Speaker 2: least as high as as what the revenue reductions would be.

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Speaker 3: So it is difficult. A lot of people be better off.

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Speaker 2: I think building our own reinvesting in our own business

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Speaker 2: rather than going out and buying others.

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Speaker 1: A lot of people believe that in the next administration

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Speaker 1: you would have much looser antitrust regulations as well lighter

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Speaker 1: antitrust enforcement. Does that mean you said you would build yourself,

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Speaker 1: but would you ever consider a transformative deal, something that

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Speaker 1: would be a merger of equals or even larger.

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Speaker 2: This is not a question I was prepared to deal

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Speaker 2: with today. But well, of course, I mean, we look

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Speaker 2: at everything, but it doesn't mean that this is not

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Speaker 2: something I ever thought about, to tell you frankly.

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Speaker 1: So the other thing where a lot of investors are

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Speaker 1: expecting much lighter regulation is in the world of cryptocurrencies.

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Speaker 1: How do you feel about cryptocurrencies from where you stand?

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Speaker 1: And do you think that when your clients are going

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Speaker 1: to interactive workers, it's going to be something they're asking

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Speaker 1: about more and more and more.

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Speaker 2: Two Currencies are a very interesting area. We have been

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Speaker 2: into cryptocurrencies for about three years. We charge less commission

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Speaker 2: and a crypto currency trade than any other firm other

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Speaker 2: than robin Hood, but robbin Hood has a lot a

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Speaker 2: wider spread because they get their commissions paid by the

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Speaker 2: market maker who they send their orders to. So I

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Speaker 2: think unbalanced, our platform is probably the most efficient one

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Speaker 2: for a crypto trader. And otherwise I am to tell you, frankly,

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Speaker 2: I'm sort of scared of cryptos because you know, they

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Speaker 2: can go to any price, because it's basically just a

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Speaker 2: figment of imagination, so it doesn't have any any underlying value.

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Speaker 2: The only value it has is the same as the

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Speaker 2: paper dollar, which is nothing.

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Speaker 1: But you've seen people pull in nonetheless through ETFs. You

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Speaker 1: saw the price of bitcoin get to one hundred thousand dollars.

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Speaker 1: Will the investor of tomorrow be more likely to buy

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Speaker 1: bitcoin or a US stock?

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Speaker 2: Well, it depends.

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Speaker 3: Well. For a bitcoin, you can buy US stocks right.

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Speaker 2: For a US stock, it's more difficult to buy bitcoin, right.

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Speaker 2: So I think that anybody who does not have bitcoin

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Speaker 2: should have some bitcoin, but not too much. I would

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Speaker 2: recommend that people put maybe their two to three percent

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Speaker 2: of their network into bitcoin. And we, for example, will

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Speaker 2: not allow anyone to invest more than ten percent of

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Speaker 2: their as into bitcoin because I think that would be

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Speaker 2: very dangerous.

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Speaker 1: And if you have one area that investors should look

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Speaker 1: at for next year, the biggest risk on the horizon.

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Speaker 1: Everyone is talking about so much growth and soar and

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Speaker 1: stock markets. You mentioned you're worried that you could actually

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Speaker 1: see a downturn, which is contrary to what everybody else

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Speaker 1: is out there saying. Right Many people are out there

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Speaker 1: saying right now, what's the biggest risk on the horizon so.

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Speaker 2: A downturn is a very big risk because margin balances

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Speaker 2: have been growing very very quickly, and especially if you

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Speaker 2: take a thing like bitcoin. I mean, you know, margins

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Speaker 2: on bitcoin futures for example, charged by the CME are

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Speaker 2: extremely low. So I am very worried that people over

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Speaker 2: extend themselves. A sudden hit comes into the market and bitcoin.

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Speaker 3: For save thirty forty fifty.

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Speaker 2: Percent from one day to the next, there'll be many bankruptcies.

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Speaker 2: The clearing house will be unable to pick up the

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Speaker 2: pieces and it basically will or that the bad that

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Speaker 2: will be transferred to the clearing members. So this is

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Speaker 2: a difficult situation. If it happens now, the probability is

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Speaker 2: not very high that it will happen, but it certainly

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Speaker 2: it could happen. So I wish that everybody please pay

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Speaker 2: attention to these situations and try to take preventive measures

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Speaker 2: and do not extend margin so easily.

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Speaker 1: It's a good reminder to in the middle of all

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Speaker 1: the exuberants keep an eye out.

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Speaker 3: For those risks.

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Speaker 1: That is Thomas Pedrophy. Of course, tremen of interactive brokers