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Non-Tech : Interactive Brokers / Timberhill -- Ignore unavailable to you. Want to Upgrade?

To: Carl Worth who wrote (7363)	5/2/2007 2:20:21 PM
From: sams291	Read Replies (1) \| Respond to of 9012

carl, i hear what you are saying about accepting some occasional bumps in margins... however if the stock is priced at 30x eps, investors will demand a very high level of consistency and visibility in quarterly growth. As, I'm sure you appreciate--expectations become very fine tuned for companies, the higher the multiple goes. Sometimes a newly public management team misunderstands this -- they shake their heads in disbelief when they 'hit the number' and then see their stock drop 20%... it's about managing expectations... and this is an artform, not science. as for expanding their presence among institutions-- i think there exists a niche of individual/professional money managers who might be attracted to IBs platform. However, I also suspect ib mgmt may not fully understand that having the fastest widget or one with interesting looking bells and whistles, is not always what the big guys want... more and more frequently the growing hedgefunders want personalized service, personal handling of large/block trades, personalized backoffice / clearing, soft-dollar services, etc. IB may be missing this nuance as the top guys are from a programming background with less of a feel for customer service considerations. While IB will adamantly tell you that professionals appreciate their platform (and those who don't are by default 'not professional'), it may be worth also polling to measure how their customer service stacks up. BTW, don't misconstrue my comments to think I am not enthusiastic about IB ... just a question of valuation and what is expected at a 30x p/e vs. a 20x p/e.