Jeff Yass, the billionaire co-founder of Susquehanna International Group (SIG), is one of the most successful and secretive figures in modern finance. A professional gambler turned quantitative trading titan, Yass built his empire by applying the principles of poker and game theory to financial markets.[1][2][3][4][5]
On Trading & Market Philosophy
1. The "Mark" Theory
"All of sports betting, all of playing poker, and all of options trading is making sure you’re betting against someone you’re smarter than.[5][6][7] If you’re not asking yourself, ‘Am I the sucker, or am I the bait?’ you get arrogant and you get crushed."
(Source: Bet The Process Podcast)
2. The First Rule of Trading
"The moral is that in trading it’s important to examine the situation from as many angles as possible, because your initial impulses are probably going to be wrong. There is never any money to be made in the obvious conclusions."
(Source: Forbes Profile)[5]
3. Markets as a Poker Table
"The beautiful thing about the market is that it’s a poker table with unlimited seats. If you think you can beat me, there’s a seat open. If you won't take the seat, I don’t care what you think."
(Source: Financial Times / Frederik Journals)
4. On Crash Probability
"Given the nature of the market, the chance of a crash is always greater than the chance of an overnight runaway euphoria."[8]
5. Diversification is Free Money
"If you invest and don't diversify, you're literally throwing out money. People don't realize that diversification is beneficial even if it reduces your return.[8] Why? Because it reduces your risk even more."[8]
6. Traders Are Made, Not Born
"We believe we can train any intelligent, quick-thinking person to be a trader. We feel traders are made, not born."
(Learning: This is the foundation of SIG’s famous internal education program.)
7. Finance as Progress
"When you're against finance, you're fundamentally against all human progress.[9] Finance is the way human beings progress. Someone lends money to someone else... and that's how we move on to the next project."
(Source: Adam Smith Society Interview)
8. The Market Protects the Ignorant
"In the stock market, you are protected from your own ignorance by free market forces. Because the people who do know what's going on are battling it out to give you a fair price."
(Source: Adam Smith Society Interview)
9. Betting on Truth
"The prediction markets are objective.[10] If you think the odds are incorrect, then go bet it... If you really are smarter than the markets, you'll make a lot of money [and] you'll do society a favor because you'll get the price right."[10]
(Source: Generating Alpha Podcast)
10. On "Experts" vs. "Speculators"
"This is going to infuriate every college professor... because they want to be the experts. But they're not a bunch of speculators battling it out every day in the marketplace."[10]
(Source: Generating Alpha Podcast)
On Decision Making & Poker Strategy
11. Poker is Training, Not a Game
Yass views poker not as a leisure activity but as the ultimate training ground for decision-making under uncertainty.[1] SIG new hires are required to play poker to learn how to quantify an "edge."
12. The Fatal Flaw of Certainty
"You have to get out of the mindset of 'this is true' or 'this is not true.' There is no such thing. It's all uncertainty.[11] It's all expected value."
13. Defining Your Edge
Learning: You must be able to mathematically define your edge before placing a trade. If you cannot explain why you have an advantage over the person on the other side of the trade, you shouldn't make it.
14. Thinking in Probabilities
Learning: Never think in absolutes. Instead of saying "I think this will happen," Yass trains his team to say, "I believe there is an 80% probability this will happen," and size the bet accordingly.
15. Emotion is the Enemy
Learning: In both poker and trading, emotion leads to ruin. The goal is to make the mathematically correct decision regardless of the immediate outcome (winning or losing the hand).
16. "Resulting" is a Sin
Learning: Do not judge a decision by its outcome. You can make a terrible decision and get lucky (win money), or make the perfect decision and get unlucky (lose money). Yass focuses only on the quality of the decision process.
17. Sizing Your Bets
Learning: It is not enough to be right; you must bet the right amount. If you have a massive edge, you bet big (Kelly Criterion). If you have a small edge, you bet small.
18. The Value of "Checking"
In trading, as in poker, sometimes the best move is to check (do nothing) and gather more information before committing capital.
19. Discipline Over Intelligence
Learning: Raw intelligence is less important than the discipline to stick to your system when things are going against you.[10][12]
20. Fold Early
Learning: Cut your losses immediately when the math changes. Don't throw "good money after bad" (sunk cost fallacy).
On Education Reform & School Choice
21. Government Monopoly
"There is no possible way a government monopoly could be a better approach to schools than market competition, particularly for poor children.[13] It’s a civil rights issue."
(Source: Philadelphia Magazine)[13]
22. "Legalizing" Education
"We talk about education reform. I'm not really for education reform; I'm for education legalization."
(Source: Yass Prize Summit)[14]
23. The "STOP" Principles
Learning: Through the Yass Prize, he funds education models that meet the STOP criteria: Sustainable, Transformational, Outstanding, and Permissionless (operating without needing government approval).
24. Funding the Child, Not the System
"The money remains with the child and goes for their education.[3] It just doesn't go to the big, wasteful bureaucracy anymore."[3]
25. Following the Smart Money
"Milton Friedman... said, 'School choice, that's the most important thing.'[3] So as a gambler, I was like, well, I got to ask the guy who has the best opinion. I want to bet with him."
(Source: Philadelphia Magazine)[13]
26. Competition Solves Quality
Learning: Just as competition creates better products in the private sector, Yass believes forcing schools to compete for students will inevitably raise the quality of education for everyone.
27. The Moral Imperative
"If a school cannot fix itself, if it does not adequately educate its children... it doesn't deserve to be open."
28. Educational Freedom
"We wanted to help more children have better options because we believe education could improve the rest of their lives — which could, in turn, create a more equitable society as a whole."
(Source: Yass Prize Op-Ed)
29. Permissionless Innovation
Learning: The best educational solutions come from entrepreneurs who don't ask for permission. The "Permissionless" pillar of his prize rewards those who operate outside traditional constraints.[12]
30. Escaping the Zip Code
Learning: A child's future should not be determined by the zip code they are born in. This is the core driver of his "civil rights" argument for school choice.
On Business & Management (SIG Principles)
31. Decision Making (Core Value)
Learning: "We take a rigorous and analytical approach to decision making. Becoming a good decision maker requires reflection and practice."
(Source: SIG Core Values)
32. Teamwork (Core Value)
Learning: "We believe that smart people working together always come up with a better solution than the lone genius."
33. Growth Mindset (Core Value)
Learning: "We are constantly learning and challenging ourselves to grow. Our commitment to development and hard work drives our success."
34. Use Games for Hiring
Learning: Yass famously uses poker and strategy games during the interview process to test a candidate's risk tolerance and quick-thinking abilities, rather than relying solely on resumes or GPAs.
35. Bootstrapping with Gambling Winnings
Learning: Yass originally funded Susquehanna with money won at racetracks and poker tables.[5] Lesson: Capital can come from unconventional sources if you have a proven edge.
36. Restrictive Covenants
Learning: SIG is known for strict non-compete clauses. Yass believes that because they teach proprietary thinking methods (their "secret sauce"), they must aggressively protect that intellectual property.
37. Focus on Derivatives
Learning: Yass realized early that the "edge" in simple stock picking is small. He focused SIG on derivatives (options) where complex math creates a larger barrier to entry and more opportunities for arbitrage.
38. Corporate Culture of "Gaming"
Learning: At SIG, playing games (poker, chess, Settlers of Catan) during work hours is encouraged. It keeps the brain sharp and reinforces the firm's probabilistic culture.
39. Adaptation is Survival
Learning: SIG evolved from open outcry floor trading to high-frequency algorithmic trading. Yass teaches that if you don't adapt your methods to technology, you will go extinct.
40. Flat Hierarchy for Ideas
Learning: In a trade, it doesn't matter if you are the CEO or a junior trader; the only thing that matters is who has the correct probability assessment. The best idea wins.
On Politics & Liberty
41. The Necessary Evil Myth
"We have tried the approach that [businessmen] are a necessary evil... There is no moral foundation for it... I think business leaders need to stand up for capitalism."
(Source: Adam Smith Society)
42. Income Inequality
"Just when income inequality is evaporating... the left came up with this idea of income inequality. It's like, what are you talking about? It's just the opposite."
(Note: Yass argues that global capitalism has lifted billions out of poverty, reducing global inequality.)
43. On "Money Lenders"
"Throughout history, the money lenders have always been viewed with suspicion...[9] [But] when you're against finance, you're fundamentally against all human progress."[9]
44. Libertarian Consistency
Learning: Yass is a registered Libertarian.[4] His political spending (often for Republicans) is purely transactional based on who supports school choice and free markets, rather than party loyalty.
45. Wealth Tax Opposition
Learning: Yass vehemently opposes wealth taxes, arguing they confiscate the capital that is actively being used to build businesses and create jobs.
46. Donating for Leverage
Learning: Yass treats political donations like bets.[2] He looks for "high leverage" situations (like local state primaries) where a specific amount of money can actually change the outcome, rather than just dumping money into a general election.
47. The "TikTok" Bet
Learning: Yass’s investment in ByteDance (TikTok) is a prime example of "asymmetric upside." He bet early on a tech platform that had the potential for global scale, resulting in a payoff that dwarfed his trading profits.[2]
48. Voting with Your Feet
Learning: Yass supports policies that allow people (and capital) to move freely to where they are treated best, whether that is students moving schools or businesses moving states.
49. Skepticism of Regulation
Learning: He views most government regulation as a hindrance to the "discovery process" of the free market, which is the only mechanism that can efficiently set prices and allocate resources.
50. The Long Run
"The math always wins in the long run."
(Learning: Short-term variance is luck; long-term results are skill. Structure your life and business to survive the short term so you can benefit from the long term.)
Sources
