The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 27 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 0 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Simkin: Unlimited upside asymmetry won't stop venture capitalists from going broke
“But that does not mean because of the asymmetries that venture capital is a winning business because you've got this unlimited upside, or that insurance is a losing business because you've got this unlimited downside. Ultimately, what it comes down to is appro…”
Simkin: Black-Scholes wrongly assumes stock distributions are right-skewed, not left-skewed
“The Black-Scholes model, which is literally Nobel Prize winning math, this is amazing stuff, has assumptions built into it that we know are just wrong. Among the assumptions that are built in is a normal distribution of stock returns, which would lead to a log…”
Simkin: Traders are made, not born, and can be taught
“That they had the firm belief that traders are Made, not born. So it's not the case that you have to find somebody who is inherently a trader, and then you just put them in the right spot, and they go. Instead, they said, if you bring us any smart person, if y…”
Simkin: Susquehanna refuses to lock in profits while expected value is positive
“At Susquehanna, we'd say, no, if anything, if we're able to buy more at 19, and we still think it's worth 20, then we would. The fact that we got to buy it for 10 is great, sort of confirmed now by the fact that someone's willing to pay 19, but that doesn't me…”
Simkin: SIG backed ByteDance for diversification, not foreseeing TikTok's global dominance
“I alluded to being fortunate enough to invest in ByteDance when it was a several million dollar company before it became a several billion dollar company. It'd be great in hindsight to say we are so good at figuring out what social media platform is going to b…”
Simkin: A five-year fund structure would have forced SIG out of ByteDance
“If we had entered our ByteDance position, and it was in a fund where the investors needed to get paid back in five years, we would have closed out of that position and made a little bit. It would have been happy day in the office, and we would have been out of…”
Simkin: Trading decisions function like intuitive grammar, not a mechanical checklist
“If I had a script for it, it'd be easy, because then I would just give people a script to use as a checklist like a pilot does when they're starting up their plane, or like a surgeon does when they're starting a surgery. I don't have a script, and I wish I did…”
Simkin: Traders must articulate underlying conditions driving their decisions
“You've incorporated that into your decision process, but if you don't say it out loud, your decision process sounds odd to me. But then you say, here's the pattern that I've noticed, and here's what I'm pricing in, and you say, okay, well then that makes sense…”
Simkin: Counterparty willingness to trade illiquid assets signals severe adverse selection
“There were very esoteric products that traded in Europe that did not have a lot of liquidity, which meant that if I was trading, I was probably trading against other professionals who were doing a good job of figuring out the appropriate fair value and the exp…”
Simkin: Quants must update assumptions based on pricing sensitivity when trading
“And the other thing is, in a Bayesian way, to update my assumptions when somebody is willing to trade against me by looking at those points that are most sensitive. So understanding not only the outputs of the model, Here's the price at which we think you shou…”
Simkin: Susquehanna expands into insurance and partners with Kalshi prediction markets
“Most recently, in the last few years, we've moved into insurance, which is where I spend all of my time now, is thinking about insurance products. And similarly, we've also recently did a partnership with Kalshi, where we are providing liquidity in event marke…”
Simkin: Client reporting and rigid mandates structurally constrain external hedge funds
“One of the problems with hedge funds is that they have to frequently manage to Not just quarterly reports, but monthly reports, or even weekly and daily reports. So they've got to show that they're staying with the strategy that they have outlined for their in…”
Simkin: Proprietary capital gives large-scale trading firms agility without LP constraints
“We get all of the benefits of having a large capital base with all of the benefits of having a small number of decision makers at the top who are weighing in. They're not putting artificial rules in place that we might have seen if we had ever taken outside mo…”
Simkin: Susquehanna holds positions to maturity unless underlying information changes
“Part of the culture of the firm is one in which we are Finding edges wherever we can find them, but then capturing all of it by either holding to maturity or holding to expiration or closing at an appropriate rate when we have either new information or where t…”
Simkin: Early-stage venture checks function as real options to hold and learn
“Sometimes what we are doing is R&D type investing. We are putting money in so that we have an embedded option to keep our money in. That what we are buying is, in the parlance of economics professors, a real option, and the real option is that we don't have to…”
Simkin: Binary prediction pricing communicates risk clearer than traditional asset prices
“So having a price that you can immediately turn into a probability really leads to improved communication about the underlying risk in a way that you don't have even in the financial markets. What does it mean for a stock to be trading for a 117 dollars? You h…”
Simkin: Sports odds pricing requires combining inside handicapping and outside statistics
“This is again that marriage of art and science. So some of it is being a good handicapper, being able to look at Jared Goff and decide how strong is he as a quarterback with this certain receiver core. That's part of it. And that is what we would refer to as t…”
Simkin: Insured contingent promotions embed customer call options, outperforming standard discounts
“From your perspective, it costs you the exact same amount of money, except that now you're not hoping to go from a 100,000 to a 120,000 dollars a month. You're hoping to go from a 100,000 to 500,000 dollars a month because anybody, whoever was in the market fo…”
Simkin: Susquehanna trainees manage small books before trading class
“One is before ever going through our trading class, our quantitative traders are working directly on trading desks, talking to the traders who are making decisions about the decisions that they're making, and they gain responsibility over time. So they will be…”
Simkin: Susquehanna operates a sports trading unit in Ireland
“We've moved into creating a sports trading unit that is trading on sports books in Europe, and that group is in Ireland.”
Simkin: Uncorrelated businesses scale profit linearly and variance sublinearly
“Our businesses being uncorrelated means that over the long run, I expect my profits to increase by the expected value of each of these businesses, but my variance, my standard deviation only to go up by the square root of the number of Businesses or exposures …”
Simkin: Susquehanna employs more technologists than traders
“The greatest pool of employees that we have is not traders, it's technologists, because so much of what we do relies on good quality technology infrastructure and business infrastructure that our technologists are able to build out for us.”
Simkin: Susquehanna operates a weather trading desk with an in-house meteorologist
“We have some weather derivative risk that we take. Well, we've got a weather derivatives trading desk, and we have a meteorologist on staff.”
Simkin: Jeff Yass threatened my job over Jeopardy wagering strategy
“At the time, Jeff Yoss, one of the founders of Susquehanna, walked into my office and said, look, nobody cares if you know anything about American history, but if you mess up the betting, don't bother coming back on Monday.”
Simkin: Jeff Yass merged trading firms to form Susquehanna in 1987
“Jeff Yaz started his own options trading company on the Florida Philadelphia Stock Exchange in 1981. Some of the other partners of Susquehanna in the early days had their own companies that they merged together to come together as Susquehanna in 1987.”