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

A few years ago, a young Susquehanna trader named Alex Mendoza bet around $500, he says — a hundred with one guy, $50 with another, a lot of side bets, just like the trading floor itself — that he could do 300 push-ups in 45 minutes. He didn’t make it. He paid off his bets, and then was quietly told by management not to make that sort of wager again.

Not because of the amount — $500 is lunch money to a trader. Mendoza was reprimanded because he’d gotten ahead of himself. He had made a dumb bet, because he really didn’t know if he could do 300 push-ups in 45 minutes. If you don’t know the answer, betting is a gamble, utterly antithetical to the Yass method.

“Every mistake, every loss, becomes a teaching moment,” Mendoza says. He means both in trades and in how traders think. “When you’re constantly reminded of how the world works and how it doesn’t deviate, you start to think that way.”

How many doughnuts can you eat in 20 minutes? Research! A trader in the New York office surreptitiously went to Dunkin’ Donuts, took the doughnut maker aside, learned which ones are the lightest, have the least filling and sugar and calories, etc. Pocketing a few hundred bucks after winning his bet, he sat back at his desk munching the richest, most sugary doughnut. Just to rub it in.

If you open your mouth, back it up. How many people will know what year — within 20 years, within 10 years, five — Abraham Lincoln was shot? Is Alabama bigger than Wisconsin? One year, traders in the Chicago office bet on snow futures, a made-up security, wagering against (or for) a harsh winter.

This is the place you want to work. You’ll get rich and have a sporting time. Always seeking edge. A couple of giggling traders from the New York office once made a bet on something they figured Yass couldn’t possibly know, and gave a quick call to the Bala office:

“Jeff, who was the last king in the Plantagenet dynasty?”

“Richard the Third!” Yass growled, slamming the phone down. Very well-read guy, that Yass. Dumb to bet against him.

For a long time, Yass didn’t lose the betting bug. A trader named Francis Wisniewski says he kept getting kicked off his computer in the Bala office back in the ’90s so Yass and Dantchik and Greenberg could check the odds, place Pick 6 bets. (The company denies this.) The firm also hosts poker tournaments — Jeff Yass deals — with cash prizes. It’s a way of attracting top-drawer recruits (employees don’t risk their own money) and of vetting them as decision-makers: reckless poker player equals reckless trader. Susquehanna has become renowned in the trading world for its three-month tutorials of new hires, where in-house games of poker are front and center as a teaching tool. After-hours games in the offices — that’s just for sport.

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  • Gary

    FYI

  • Bernice

    As a gambler, and card player I wish Jeff Yass all the luck in the world. Anyone that intelligent should always hit a hole-in-one. Good luck to you and Susquehanna.

  • Johan

    If Yass is taking credit for solving the ‘Monty Hall’ problem, I would not trust him.

  • farty

    He’s not taking credit for solving the monty hall problem. Because that would be dumb. The author was using the monty hall example as a hook to demonstrate that complex probability questions can be counter-intuitive and to make the point that these answers are obvious to somebody as smart as Jeff Yass but not to the rest of us. It was the worst part of the article, because it’s been so over used as an example that even knee-jerk brain poopers like you have heard of it.

  • deborah

    Entire article says nothing other than Mr. Yass likes Poker, something that anyone could Google. Misleading headline gives the impression the reader will discover some inside scoop. Reading your arti