After long last, I have some portfolio changes.
One month ago, I reevaluated my Apple position. At $1t market cap, the company becomes too big to offer reasonable return with any margin of safety. I remember in December 2018, the market was overly pessimistic with several articles challenging the shift to service and their problems with China etc. Nothing much has changed. But, the stock has climbed nearly 50% from $150 to $220. All things aside Apple is very cheap at 12x earnings but not cheap at 18xearnings.
I would have likely done nothing if an opportunity had not presented itself.
Interactive Brokers came up with an IB Lite product. This is a great move which brings forth the distinction between IB pro and all other brokers.
* IB does not sell order book to market makers
* IB pays reasonable interest on cash (libor-0.5%)
* IB has the lowest commission.
What does not work in IBs favor is it’s platform which is targeted at traders. There is a learning curve.
IB Lite (no comissions, sells orders for money) with a good app will be a game changer!
Meanwhile, Schwab and Ameritrade announced 0 comissions. They will still continue to sell your orders and pay almost no interest on your cash.
IB has a great product and is playing a game that others can’t! Their smart routing tech saves a lot of money for now IB Pro customers.
I have replaced Apple with IB.
On other front, IB is an owner operator with the founder owning ~ 80%. They have ~ $6b of regulatory capital while they only need $1.5b!
It is a well run and safe broker and is the cheapest around. This is a hard product to compete with.