I recently caught this video interview with the billionaire found of Interactive Brokers in which he expressed a very grim outlook on US stock markets when asked “do you think we’re headed for another market crash?”
His exact words: “There will be crashed and there will be a final crash, a final crash from which there is no return.”
Grim market forecasts are nothing new but usually they come from known gold bugs or commodities investors. That’s why Petterfy’s outlook was interesting to me — his wealth was made through interactive a brokers which is a brokerage firm catering to institutional investors, and use of derivative products. Expressed directly, his wealth was built from equities markets and high risk financial instruments, which is in stark contrast to the people using scare tactics to sell bullion.
So that had me curious, what is he investing in personally?
If he is truly worried about a market crash, where is his money?
So I did some digging.
I learned that currently owns 75% of Interactive brokers with a market cap of IB 32.65bn. That’s an incredibly large stake in a company and I wonder if he’s the largest personal owner of a public company?
His net worth is estimated at 23.7b according to Bloomberg.
Based on those numbers nearly all of his net worth is in Interactive Brokers stock.
I found that he also owns 561,000 acres of farmland he purchased in North Florida in 2015 for $700,000,000. Interestingly any other billionaires have been investing in farmland. The current market value of the farmland isn’t published but considering real estate values in Florida over the last few years I’d ballpark it close to 2bn.
No matter how you slice and dice these estimates, his holding of Interactive Brokers is about 95% of his net worth, while he has the remaining 5% in farmland. As a brokerage firm, the value of the Interactive Brokers stock is directly dependent on the stability and growth of US equity markets.
That’s a lot of exposure to US equity markets for someone concerned about a “final crash”.