Beating the Odds – Susquehanna International – Jeff Yass

Jeff Yass was always a little different from his peers — a brilliant young man taken with poker and horse racing and the power of rational decision-making. He’s used all of it to turn his company — Bala Cynwyd’s stealthy and mysterious Susquehanna International — into one of the world’s most lucrative and powerful financial firms

It might be tough to swallow, these days, that a rich trading firm represents what is actually right about American finance. But Jeff Yass has made the case, over the years, in eloquent off-the-cuff presentations to his traders, for the value of Susquehanna’s role in the marketplace. This, too, is part of the Yassian worldview — he’s on the board of directors of the Cato Institute, a promoter of limited government and free markets. Though his views on markets really reach all the way back to his Binghamton years, to his senior thesis on the “social value of options.”

In a nutshell, Yass posits that Susquehanna’s huge volume of deals bolsters liquidity, wherein assets can easily be converted into cash, and that liquidity is a hallmark of the American financial markets. The ease and speed of buying and selling securities makes our markets, in turn, the engine that drives creative industry. If, for example, you have a phenomenal idea for a new and improved widget but you happen to live in Outer Mongolia, where there is no money to be had for anything, coming to America is your godsend. We have investors who are ready and willing to help you out, given that whatever money they put into the market — into your new and improved widget — can be recouped. That’s because our markets are so liquid, with the constant buying and selling of securities. Exactly what Susquehanna is all about.

A FORMER TRADER remarks on Yass’s utter belief in linear intelligence, especially his own. Yass once said, “If I had time, I could be one of the best golfers in the world.” He might actually have meant it. Isn’t golf the ultimate brainiac’s game? I asked John McNeil, the caddie Yass made $50,000 richer, whether the Yass mind could overcome limited athletic ability. His answer was immediate: “No.”

But take Dan Quayle, the vice president who was accused of having an ordinary brain. Yass once argued with a trader that Quayle had to be intelligent. Why? “Do you know how good a golfer he is?” Yass replied, laughing.

The former trader considers what is fundamentally more important to Yass, money or brains. “At one point,” he says, “it had to be money, but he might have crossed over a long time ago.”