100Baggers

100-BAGGERS DISTILLED: ESSENTIAL PRINCIPLES 177
Matt Goodman (the analyst who did the case study on Monster Beverage)
did an analysis of IBKR, a stock we recommended in our newsletter.
He showed how it has been applying new technology to an age-old
business. Its platform is more capable than competitors and it is easily
the least-cost option.
You can see this anecdotally in industry news, as Goodman points out:
• According to legendary trader Peter Brandt, talking about Interactive
Brokers, “On one trading platform and with one account I
can trade the world—from US to global futures markets, US and
global stock exchanges, options, forex, you name it. . . . Credit
Suisse would offer me the same package for an account worth
$50 million. Ditto for Goldman and D-Bank. No other firms I know
of provide this capability for accounts under $5–10 million.”
• Bank of America, JPMorgan and others are giving their hedge fund
clients the boot. Some, like E-Trade, are closing global trading accounts.
Where do these customers all go? Interactive Brokers.
• Scottrade recently added its clients to IBKR’s platform. Scotttrade
is a competitor, and it’s essentially put up the white flag.
Goodman writes you can also see all of this in the numbers. He showed
how growth in new accounts was actually accelerating at IBKR:
Interactive brokers
electronic brokerage statistics
2015
Apr
% Change
Pr Mo Pr Yr
Pr Mo Ann
(in 000’s)
Total Accounts
302.0
2%
18%
23%
Net New Accounts
5.6
-16%
40%
(in Billions)
Client Equity
$65.2
7%
32%
780%
Client Credits
$33.6
6%
24%
68%
Client Margin Loans
$8.7
8%
27%
97%
“This is information one can find in the IR section of the IBKR website,”
Goodman wrote. “I added the last column, ‘Prior month annualized.’” Key