Forecast Challenges: Why Does the World's Richest Person Jeff Yass Believe in Him?

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In the “Generating Alpha” podcast, the world’s richest man and founder of Susquehanna International Group (SIG), Jeff Yass, shared important insights. Over more than 40 years, he has built a global trading empire, operating in various markets—from options to cryptocurrencies—based on mathematical precision and rational thinking.

The conversation centered on one main topic: why prediction markets might play a role in humanity’s pursuit of truth.

Why Are Prediction Markets Important?

As Jeff Yass, one of the wealthiest people in the world, can say, the most important thing in decision-making is not having incorrect information, but obtaining accurate probabilities.

Prediction markets are currently the most reliable source of probabilities. If you ask whether there will be an election in New York, whether the Federal Reserve will change interest rates, or if a storm will occur, the market’s response is the answer with money on the line.

This sets it apart from previous eras. For example, let’s go back to the Iraq War period. Bush’s administration said it would cost $2 billion, but the reality was much darker: spending ranged from $2 trillion to $6 trillion. If there had been a prediction market then, experts would not have seen the false claims of a “quick and cheap war,” but rather would have seen numbers around $500 billion, which would have led citizens to voice opposition from the start of the war.

Risk and Manipulation: What Is the Truth?

What if this leads to market manipulation? Jeff Yass explained simply:

Any manipulation costs the most. If you want to show the Iraq War’s cost as “less than $5 billion,” and if enough money is in the market, you are betting against nearly $500 billion. Manipulation is much more expensive—very few can do it.

That’s why a competitive market protects itself.

Practical Applications in Business

As the world’s richest person, how does Jeff Yass apply these insights in daily work?

For example, if you are deciding to move to New York or relocate your company, knowing the probability from a prediction market is essential. Reading a newspaper and making vague statements like “they say it will be close” is less effective—by observing the market, you can estimate a 90% probability.

SIG monitors how the upcoming presidential election will unfold, which sectors will dominate the stock markets. By analyzing this information from prediction markets, they identify which stocks are less responsive or more responsive to political events.

Insurance Markets: Named for Nature’s Safety

One of the most exciting areas for me is how prediction markets can revolutionize insurance.

In places like Florida, where the government has set very low insurance premiums, many insurance companies have exited the market. But through prediction markets:

• You can agree on: “Will the wind speed exceed 80 mph in the next 48 hours?”
• If the probability is 10%, and you bet $10,000, you could receive $90,000 if your house is affected
• No advertising, claims, or operational costs—just pure protection

This approach is much cheaper and fully tailored to individual needs.

What Changes Will the World See?

Jeff Yass’s clearest opinion: wars can be prevented.

Let’s consider the 650,000 deaths during the American Civil War. If ordinary people had known the real costs and disasters in advance—markets might not have called it a 650,000 death toll—people would have sought other solutions.

Another example: autonomous vehicles. Currently, about 40,000 people die annually on US roads. If fully autonomous cars were widespread, this number could drop to 10,000—saving 30,000 lives. If prediction markets show a sharp decline in road fatalities by 2030, politicians will act faster because you see the exact number.

Today, they say, “we don’t know if it will be good or bad.” With objective data, world decisions will be faster and more accurate.

For Youth: Learn Probability and Statistics

If you ask Jeff Yass what young people should learn today, he repeatedly emphasizes: probability and statistics.

Of course, computer skills and programming are necessary. But the foundation of making decisions by identifying errors is knowledge of probability and statistics.

When the Soviet Union launched Sputnik, the US began teaching calculations compulsorily. As a result, 99% of people will never benefit from this in their lifetime. But probability and statistics are secondary skills—no one is forced to learn them.

Harvard Medical School students say, “it might happen or it might not” regarding disease probabilities—smart people, but the school doesn’t teach them. To distinguish signal from noise, knowledge is essential.

Final Advice

The world’s richest person gives this last advice to young people: trust the market.

If your friends think “this person is crazy,” don’t just ignore them. Open an anonymous prediction market on “Am I making a mistake?” Many spend their entire lives with the wrong people because no one dares to tell the truth.

The more important the decision, the less we think about it. We spend a long time contemplating buying a stock, but often make impulsive decisions about life-changing choices like marriage. The mechanism for revealing the truth is this—it’s needed.