Speaker 1: Bloomberg Audio Studios, podcasts, radio news, plan, sitting by with
Speaker 1: Thomas Petrophy of Interactive Brokers, and a lot of things
Speaker 1: dominating the conversation, but none more than the next presidential administration.
Speaker 1: When you think about what President elect Trump, who you
Speaker 1: have given to for his prior campaign and the most
Speaker 1: recent one, what do you think the most impactful change
Speaker 1: will be to investors over the next four years.
Speaker 2: Well, the most impactful aspect of the new administration will
Speaker 2: be less regulation and less interference with private enterprise. Having
Speaker 2: grown up in a socialist country, I've come to a
Speaker 2: conviction earlier in my life that a free market economy
Speaker 2: is the only way to efficiently run a society, and
Speaker 2: so I'm very happy that this is the outcome that
Speaker 2: we had this election time. I did not contribute as
Speaker 2: much to President Trump as I did to other candidates,
Speaker 2: other Republican candidates. I've always been a Republican all my life, because,
Speaker 2: as I said, a good economy can only be based
Speaker 2: on private entrepreneurship.
Speaker 1: Speaking of the Republican Party beyond Trump, I am very
Speaker 1: curious to hear what your thoughts are for Ron DeSantis
Speaker 1: political future at the end of his term. As Florida governor.
Speaker 1: Where do you think his career goes from here?
Speaker 2: Well, unfortunately, I think round the centers shut himself in the.
Speaker 3: Foot with this six week abortion.
Speaker 2: Issue, and that I mean he could I don't know
Speaker 2: if he will change his politics on that or not.
Speaker 2: That is going to be a very difficult.
Speaker 3: Situation.
Speaker 2: I was a great supporter of run for many years
Speaker 2: up until he came up with this six week abortion
Speaker 2: thing because I don't believe in it.
Speaker 3: I don't think it's a good thing.
Speaker 1: Beyond round the scantis, who do you think he has
Speaker 1: put up for the Senate see for Marco Rubio? Who
Speaker 1: do you think takes that spot in Florida? Who would
Speaker 1: you like to see take that spot? Who would you
Speaker 1: be backing?
Speaker 2: Well, I think rundiscientists would probably be the best candidate
Speaker 2: for that Senate seat, and I hope that he will
Speaker 2: do that rather than being Secretary of Defense, because I mean,
Speaker 2: from a point of view of his political future, I
Speaker 2: think a senatorial seat would be a better place to
Speaker 2: jump off up than secretary of Defense.
Speaker 1: What then, do you make of the reports that Lara
Speaker 1: Trump is being put up for that Senate spot? Do
Speaker 1: you think that she has a significant place there.
Speaker 2: Well, she certainly has done a good job this time, Iran,
Speaker 2: But I think she's I don't even know how she's
Speaker 2: Is she old enough to become a senator? She must
Speaker 2: be if they are talking about her, right, But I
Speaker 2: think she's still a very young woman.
Speaker 1: So you know, of course, are a very prominent Florida
Speaker 1: resident yourself. Activity in Florida has been very heated, a
Speaker 1: lot of people from Wall Street moving down there, and
Speaker 1: of course with the president eleft at the Winter White House,
Speaker 1: what has it been like there? Have you seen much
Speaker 1: more increased activity, especially from the business community in what
Speaker 1: is now known as Wall Street South.
Speaker 2: Well, you see, it's actually from my point of view
Speaker 2: because I live only three houses away from from mar Lago.
Speaker 2: So many times I cannot get out of my house
Speaker 2: because there are so many cars waiting in line that
Speaker 2: it's very hard for me to go anywhere. So there
Speaker 2: is a hell le a lot of traffic there. The
Speaker 2: road is always closed up, and unfortunately, you know, these
Speaker 2: assassination attempts are are very difficult to cope. So, yes,
Speaker 2: it's not easy to live in Palm Beach nowadays.
Speaker 1: You were talking earlier about the pro growth agenda, but
Speaker 1: nothing to say yet of the tariff agenda. That is
Speaker 1: something that has spooked a significant portion of the business community.
Speaker 1: Do you think that if they are put on as
Speaker 1: aggressively as had been postured during the campaign, that there
Speaker 1: could be ramifications inflation that pervades the US economy.
Speaker 2: Yes, it's certainly it's it's certainly possible. But I agree
Speaker 2: with Trump that that is probably the best tool to
Speaker 2: get to the point where eonan I get to. And
Speaker 2: I think the opposite side will see that and we
Speaker 2: will agree with it and they will.
Speaker 1: Give in What does this all mean at the end
Speaker 1: of the day for you at Interactive Brokers? If you
Speaker 1: are looking at a pro growth agenda and stock markets
Speaker 1: now record highs, another day of gains in the Nasdaq
Speaker 1: one hundred, just soaring equities, what does it mean for
Speaker 1: business for you, your clients and your ability to grow.
Speaker 3: Well, it's extremely good for our business.
Speaker 2: But I'm afraid that the markets are becoming over extended
Speaker 2: and that you know, sometime in the future we will
Speaker 2: have a downturn in the markets. But I don't think
Speaker 2: it's going to be very violent and very far. It
Speaker 2: will not go very far. So I'm extremely optimistic about
Speaker 2: the next four years and maybe when thereafter.
Speaker 1: What do you think this means for the potential to
Speaker 1: grow inorganically? Have you considered mergers and acquisitions for interactive brokers?
Speaker 3: Oh? For yeah, yes, yes we have.
Speaker 2: It is it is difficult for us to engage in
Speaker 2: any of that because most firms we look up that
Speaker 2: we would we would buy are charging more for their
Speaker 2: services than what we do, and they and they would
Speaker 2: uh price themselves based on those revenues and incomes. And
Speaker 2: of course if we were to take them over and
Speaker 2: we reduce the charges to our level, then they those
Speaker 2: profits would go down, so we we would we would
Speaker 2: buy a firm that where they where. I don't think
Speaker 2: that the that their cost reductions would be equally at
Speaker 2: least as high as as what the revenue reductions would be.
Speaker 3: So it is difficult. A lot of people be better off.
Speaker 2: I think building our own reinvesting in our own business
Speaker 2: rather than going out and buying others.
Speaker 1: A lot of people believe that in the next administration
Speaker 1: you would have much looser antitrust regulations as well lighter
Speaker 1: antitrust enforcement. Does that mean you said you would build yourself,
Speaker 1: but would you ever consider a transformative deal, something that
Speaker 1: would be a merger of equals or even larger.
Speaker 2: This is not a question I was prepared to deal
Speaker 2: with today. But well, of course, I mean, we look
Speaker 2: at everything, but it doesn't mean that this is not
Speaker 2: something I ever thought about, to tell you frankly.
Speaker 1: So the other thing where a lot of investors are
Speaker 1: expecting much lighter regulation is in the world of cryptocurrencies.
Speaker 1: How do you feel about cryptocurrencies from where you stand?
Speaker 1: And do you think that when your clients are going
Speaker 1: to interactive workers, it's going to be something they're asking
Speaker 1: about more and more and more.
Speaker 2: Two Currencies are a very interesting area. We have been
Speaker 2: into cryptocurrencies for about three years. We charge less commission
Speaker 2: and a crypto currency trade than any other firm other
Speaker 2: than robin Hood, but robbin Hood has a lot a
Speaker 2: wider spread because they get their commissions paid by the
Speaker 2: market maker who they send their orders to. So I
Speaker 2: think unbalanced, our platform is probably the most efficient one
Speaker 2: for a crypto trader. And otherwise I am to tell you, frankly,
Speaker 2: I'm sort of scared of cryptos because you know, they
Speaker 2: can go to any price, because it's basically just a
Speaker 2: figment of imagination, so it doesn't have any any underlying value.
Speaker 2: The only value it has is the same as the
Speaker 2: paper dollar, which is nothing.
Speaker 1: But you've seen people pull in nonetheless through ETFs. You
Speaker 1: saw the price of bitcoin get to one hundred thousand dollars.
Speaker 1: Will the investor of tomorrow be more likely to buy
Speaker 1: bitcoin or a US stock?
Speaker 2: Well, it depends.
Speaker 3: Well. For a bitcoin, you can buy US stocks right.
Speaker 2: For a US stock, it's more difficult to buy bitcoin, right.
Speaker 2: So I think that anybody who does not have bitcoin
Speaker 2: should have some bitcoin, but not too much. I would
Speaker 2: recommend that people put maybe their two to three percent
Speaker 2: of their network into bitcoin. And we, for example, will
Speaker 2: not allow anyone to invest more than ten percent of
Speaker 2: their as into bitcoin because I think that would be
Speaker 2: very dangerous.
Speaker 1: And if you have one area that investors should look
Speaker 1: at for next year, the biggest risk on the horizon.
Speaker 1: Everyone is talking about so much growth and soar and
Speaker 1: stock markets. You mentioned you're worried that you could actually
Speaker 1: see a downturn, which is contrary to what everybody else
Speaker 1: is out there saying. Right Many people are out there
Speaker 1: saying right now, what's the biggest risk on the horizon so.
Speaker 2: A downturn is a very big risk because margin balances
Speaker 2: have been growing very very quickly, and especially if you
Speaker 2: take a thing like bitcoin. I mean, you know, margins
Speaker 2: on bitcoin futures for example, charged by the CME are
Speaker 2: extremely low. So I am very worried that people over
Speaker 2: extend themselves. A sudden hit comes into the market and bitcoin.
Speaker 3: For save thirty forty fifty.
Speaker 2: Percent from one day to the next, there'll be many bankruptcies.
Speaker 2: The clearing house will be unable to pick up the
Speaker 2: pieces and it basically will or that the bad that
Speaker 2: will be transferred to the clearing members. So this is
Speaker 2: a difficult situation. If it happens now, the probability is
Speaker 2: not very high that it will happen, but it certainly
Speaker 2: it could happen. So I wish that everybody please pay
Speaker 2: attention to these situations and try to take preventive measures
Speaker 2: and do not extend margin so easily.
Speaker 1: It's a good reminder to in the middle of all
Speaker 1: the exuberants keep an eye out.
Speaker 3: For those risks.
Speaker 1: That is Thomas Pedrophy. Of course, tremen of interactive brokers