By Steven M. Sears

Thomas Peterffy, one of America's greatest entrepreneurs and investors, is bullish on America.

He supports President Donald Trump's tariffs and argues that the nation is at inflection point where the markets and economy will "gently float upward."

Peterffy's views stand in stark contrast to many investors and even some major banks, including J.P. Morgan, which have advised clients that the economy is poised to contract into a recession due to the president's tariff moves.

The 80-year-old billionaire investor's thoughts matter because he has a multidecade record of presciently seeing what would be before almost anyone else. He was one of the first, if not the first, traders to use computers to price options. His expertise with technology and trading led him to found Interactive Brokers Group, one of the first electronic brokerage firms, where he serves as chairman.

Take the stock market. On Tuesday, in a Bloomberg interview, Peterffy said the stock market's extraordinary fluctuations were over. The stock market closed sharply lower that day, but his prediction was proved true on Wednesday when the stock market closed sharply higher after the president announced a 90-day pause in imposing tariffs above 10% on most countries, excepting China.

Peterffy's market call wasn't based on any conversations with Trump -- whom he supported in the 2024 election -- or his cabinet, but rather on his own view of how tariffs could help strengthen America's global dominance.

"We are going to look at an economic boom because there is a lot of opportunity to create substitute products for all of those things that will suddenly be more expensive. People will have to gear up to make them at a lower price than the tariff," Peterffy said in an interview with Barron's.

His view remains at odds with the market mob, which has been obsessed over Trump's seemingly harsh approach, which shook global stock markets in ways rarely seen outside of a major crisis.

Peterffy says that he thinks people fail to understand the positive impact that tariffs could have on the U.S. economy. If foreign goods are prohibitively expensive, then those goods will be produced in America.

"Starting today, you have to hire. You have to buy land, design manufacturing, and put the things in motion, and when thousands of people are doing that simultaneously, it's a big thing and a sudden shock to the economy," Peterffy says.

He was disturbed by other corporate leaders who have advocated against Trump's policies.

"If we start infighting, we will lose the war," he says. "The heads of the country cannot afford to start infighting. We elected this man, so let's stand behind him and push the boat forward. We have one leader at a time. Let's not start bickering with each other or people will lose confidence. That's not what we want. It's exactly the opposite of what we want."

For investors, the disagreement at the highest levels of the nation creates a crisis of confidence in the country's leadership -- and in the stock market. Since Trump announced his tariff strategy on April 2, stocks essentially fell sharply from near all-time high levels into what is classically defined as a bear market.

Peterffy would prefer that Trump remain consistent in his approach and the communication of his plans. Inconsistency from the White House creates planning difficulties for businesses.

"I don't like it when he vacillates, because people cannot plan. I would prefer once he says something that he sticks to it," he says.

Trump, in ways that are unlike any of his predecessors, uses social media to directly communicate his thoughts with hundreds of millions of people. At times, the president is mercurial and speaks in ways that create further confusion, especially for investors.

Peterffy says he would love to live in a world without tariffs, but he recognizes that they aren't going away -- in part because so many countries subsidize domestic industries.

"That is unfair trading, and I don't like it. Say I'm making bagels and the other guy makes bagels but he gets a $1 subsidy from the government so he sells them for a dollar cheaper. There's a lot of subsidies in these countries. China is very famous for it -- they are very cheap on solar panels, for instance, and they do it from subsidies," he says.

There is a school of thought, Peterffy says, that international tensions will cause countries to internalize the production of necessary goods. The U.S. is a substantially stronger position to achieve that independence than is appreciated.

"That is the underlying idea for Trump's willingness to go out on tariffs because we can produce everything that we need," he says.

An independent nation, Peterffy said, has tremendous negotiating power. Ultimately, he thinks China will negotiate with America.

"Right now, it looks like China is the odd man out. This was basically a masterful situation how they ended up being the only ones out in the cold. It was really amazing. I think China has to be part of the global community. It would be too dangerous to have them not on friendly terms, " he says.

Russian President Vladimir Putin has been unusually quiet during the tariff tantrum. Peterffy thinks Putin is waiting for a good deal, and that he will get one.

Peterffy knows Trump. He has contributed to his most recent campaign. They live near each other in Palm Beach, Fla. The Wall Street titan says that Trump looks at the big picture, and has extraordinary common sense.

"He looks at all the facts and he derives his thinking without taking too much input from other people. But he is very good with his perceptions. He has a remarkable memory. His memory is incredible," Peterffy says.

Peterffy and Trump had a brief conversation two years ago. They recently saw each other at Mar-a-Lago and Trump recalled the conversation. "It was not an important conversation," Peterffy says. "When someone has that much data, it's like AI. He has a very rich memory and can synthesize information, and he is very good at that; that's what AI basically does."

He calls Trump a "strong, instinctive leader. "Everything is in his head. That's why his memory is so helpful to him."

Nevertheless, significant shifts in presidential leadership style, and in global trading and production patterns, create enormous disruption to the status quo. The stock market's recent performance is evidence of that. The sharp market declines tend to panic most people and to prevent them from seeing beyond the day's dark headlines.

Peterffy handles his own market affairs in a way that is worthy of emulation. He recently bought Alphabet, the parent of Google. He also shorted futures on the S&P 500 index as the stock market collapsed. He bought back his futures contracts before the stock market surged.

His method for adding to his Alphabet position is instructive. Rather than buying everything at once, he patiently built a position using a trading function available to his customers. He uses a computer program to "scale" into a position. If his maximum position size is 100,000 shares, he would buy 1,000 shares at, say, $150, and then buy another 1,000 shares nine cents lower. He takes profits, too, in a similar fashion when the stock bounces higher.

Peterffy favors Alphabet because he believes the stock is mispriced and misunderstood. "I think they are at the very forefront of AI and not appreciated as much as the others are, and I don't understand why," he says.

He thinks Alphabet is a reasonably priced stock that will be one of the artificial-intelligence winners.

Peterffy is a remarkably hands-on executive, in addition to also being one of the world's richest men. He is intrigued by AI, and has even used it to help him write TV commercials for Interactive Brokers. He shared that he entered two sentences into an AI program that he was interested in expanding into a TV commercial.

The AI program produced three pages of copy that even included advice on the tone of voice for the commercial.

"I was blown away," he said. "I love the stuff."

Some cynics will be quick to dismiss Peterffy's views on Trump, tariffs, and markets. They will reason that his support of conservative causes, including Republican candidates, has clouded his view.

What the critics don't understand about Peterffy is that he has plainly spoken his mind for decades without trying to curry favor with anyone. He is widely seen today for what he has become -- one of Wall Street's great men, an entrepreneur of extraordinary scope who has traveled far from a humble beginning.

Peterffy immigrated to the country from Hungary in 1965. He was penniless and slept on a friend's couch. He began as a computer programmer, and ultimately become one of the first traders to use computers to price options. From those earliest days, he founded and grew his trading operation into Timber Hill, one of the market's shrewdest trading firms.

He ultimately took some of the animating principles of his trading firm, and his trading technology, and made it available to individual investors. In doing so, he helped to break down the advantages long jealously hoarded by the major banks.

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This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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April 10, 2025 11:25 ET (15:25 GMT)

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