Wall Street pioneer Thomas Peterffy told CNBC on Monday he sees more room for stocks to fall before they reach what he considers fair value. In an interview on "Squawk Box," the billionaire founder and chairman of Interactive Brokers said he thinks fair value for the S & P 500 is "around 15 to 16 times earnings." The broad equity index closed Friday's session at 4,123.34, which put its forward earnings multiple at 17.62, according to FactSet. Based on FactSet's current earnings estimates for the next 12 months, here's where the S & P 500 would trade if it falls within Peterffy's valuation outlook. 15 times earnings: 3,510 (almost 15% downside from Friday's close) 16 times earnings: 3,744 (about 9% downside from Friday's close) It's already been a tough year for the market, and Peterffy doesn't think the slide is over just yet as investors face a number of headwinds. They include the Federal Reserve raising interest rates in an attempt stamp out the hottest inflation in the U.S. since the early 1980s. The ongoing Russia-Ukraine war is another uncertainty weighing on both global economic growth and investor sentiment. The S & P 500 ended Friday firmly in correction territory, down about 14% from its most recent record high in early January. On Monday, shortly after Peterffy spoke on CNBC, stocks opened lower across the three major U.S. stock indexes. Asked by CNBC's Andrew Ross Sorkin whether investors should start buying the dip in the market, Peterffy responded: "At some point, definitely, but I don't think yet." "There are certain stocks that people should be doing their work on now and getting prepared to buy them as they as are coming down, and yes, mostly in the technology area," he said. "But just like the 2000 dot-com bust, most of the technology companies are not around anymore, so you have to be very careful which ones you are picking," he warned.
Thomas Peterffy, founder of Interactive Brokers.
Andrew Harrer | Bloomberg | Getty Images
Wall Street pioneer Thomas Peterffy told CNBC on Monday he sees more room for stocks to fall before they reach what he considers fair value.