#435 Zach Cox the 12-year old Trading Wonder

Zach Cox is a 12-year old from the UK who recently gained popularity on the internet. Here is his story.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano, most of you know me as Pomp, you're listening to the Pomp Podcast, simply the best podcast out there, let's kick this thing off. This is a special episode of the Pomp Podcast where we record with 12-year-old Zach Cox. For those that don't have the background, the other night, a friend of mine, Jim O'Shaughnessy, sent me a link to this 12-year-old kid in the UK who is posting YouTube videos about investing in public companies. The content's really good and it's very clear how intelligent he is. So I tweeted out saying everyone should go follow him so that when he woke up, he would have a lot more followers. Well, now he's got almost 20,000 followers and he's planning to just keep cranking out content.

• 0:46Anthony Pompliano?

  I wanted to get him on the podcast quickly so that people could hear his perspective. We also talked with his mother and made sure that she consented to this conversation. I hope you guys enjoy this one.

• 0:57Speaker 01

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 1:29Anthony Pompliano?

  Alright guys, bang, bang, I've got a special treat for you today. I have a 12-year-old on the podcast, which is not probably what anyone is expecting, but I've got Zach here with me, thanks for doing this, man.

• 1:42Speaker 02

  No, thank you for getting me like Twitter famous, I guess.

• 1:47Anthony Pompliano?

  So, let's start with this, you live in the UK, right?

• 1:51Speaker 02

  Yeah.

• 1:52Anthony Pompliano?

  Alright, and what do you do all day? Because you've got these YouTube videos that you upload all about investing and companies. Where does that interest come from, or when did you start looking at things in finance and business?

• 2:06Speaker 02

  It's just like, you know, when you're on YouTube and stuff, you always get a load of adverts. And like my broker at the moment ran a massive advertising campaign one time. I was everywhere and I just put like 40 quid into it, just to see how it went. Originally, I just started doing like the UK stock market and stuff. That didn't go too well with the UK stock market. It's not like, it's not as good as the US. It's not as, it's takes a long, it's been taking long time to recover from the coronavirus. It hasn't like bounced back like the US stock market. So I started doing US shares. I just started building up from there. And I mean, I've seen it all. I went, at my peak, I'd been up like seventy percent on my portfolio. Literally, it was like, it went all the way down to like one percent loss.

• 2:51Speaker 02

  It's come all the way back up to sixty-five percent. You know, it's like, I've just like seen it all now.

• 2:57Anthony Pompliano?

  So, okay, so you've got a, a portfolio that you're looking after, right? And what are your friends doing? So at twelve years old, I was not talking about business. I was not talking about investing. I basically was trying as hard as I could to not have my mom find out all the dumb things I was doing. Uh, where does your interest in kind of business and investing come from?

• 3:20Speaker 02

  They're like, I got my friends into investing. He only invests a little bit. And he, yeah, he's, he's a kind of into it. If he thinks, he thinks it's quite fun. I think he just wants to get his money for his new, um, PS4 at the moment. I think he thought that'd be a good idea. Yeah, like, like with my friends, I don't really talk about it that much. We just like mess around and stuff.

• 3:42Anthony Pompliano?

  Absolutely. And so talk about these videos you've been putting on YouTube, right? So a friend of mine, Jim O'Shaughnessy, sent me a link and he said, hey, look at this guy. And basically you've got videos where you sit in front of the camera and you talk about various investment opportunities or companies. How do you film the videos? Do your parents help you? Do you do it all yourself? How does that work?

• 4:05Speaker 02

  No, I just, I just film it on my little, my little crummy little tablet. Cause my, my old tablet, I had it for like seven years. It ran out and I decided I didn't want to buy the new Apple ones. I was like, I better put in stocks instead, make, get the Apple ones. I made some money in stocks. And I've gone to UJ, I was like, oh, this is what you get for buying a sixty pound tablet with the camera footage. But yeah, so UJ would just use my dad's, but yeah, it's been pretty good.

• 4:33Anthony Pompliano?

  Okay. And so when you're doing this, um, how do you research for the videos or where does the information come from? Do you spend all day reading? Like, like you're pretty informed. It's not like, you know, you're just saying random things. So how do you look at acquiring the information or learning?

• 4:50Speaker 02

  Yeah, so like with most, a lot of my videos, it's already stocks already own. I just talk about those kind of stocks and I mean, I mean, a lot of these videos, these are just companies I've been just reading about, watching interviews about, you know, watching clips from, you know, reading investor presentations like three weeks before that. And then I just think, I'll just upload it onto my YouTube channel. So my latest one, IPOB, which is one of Chamath's ones, merging both. I had researched that for about a week before that, watched some interviews on CNBC. And yeah, that's, then I just thought, oh, I might as well make a video about it.

• 5:26Anthony Pompliano?

  So literally for the IPOB video that you made, you researched for almost a week and basically just consumed as much content as you possibly could. And then you create the video saying, you know, here's what's going on and here are my thoughts?

• 5:37Speaker 02

  Yeah, basically.

• 5:39Anthony Pompliano?

  Yeah, that's awesome. So, all right, let's talk about what happened the other night. So you basically, it looks like you had been using Twitter to try to distribute the videos and also reach out to people and say, you know, hey Chamath or others, will you allow me to interview you or will you check out my videos, right?

• 5:58Speaker 02

  Yeah.

• 5:59Anthony Pompliano?

  All right. And so Chamath responded to you. Maybe he didn't know what was going on at first. And then eventually said, you know, if your parents basically sign off on doing something like I'll help you out on your YouTube channel, right?

• 6:11Speaker 02

  Yeah, it is quite interesting that he said that, but he didn't leave an email for us, an email. So that's a little way of getting out of those, that they were like, Chamath, he's good.

• 6:23Anthony Pompliano?

  I'll give you his email and then that's part of the challenge, I think, is that you gotta go find the email to see how resourceful you are.

• 6:32Speaker 02

  Yeah, scrolling for a list of different ones.

• 6:36Anthony Pompliano?

  Okay. And so that happens. And so Jim and a couple of other people basically said, hey, this kid's pretty smart. Like, we should see if we can help him out a little bit. And so when Jim sent me the, the link to your Twitter and to your YouTube, I said, you know what, like, let me just fire off a tweet. Jim had already tweeted it. And I actually didn't know how many people would go follow you, but I said, let's see what happens. And I figured you were sleeping when all this was going on, right? Okay. And so I told Paulina, my wife, I said, you know, I'm going to tweet it and maybe he wakes up to some more followers, but like, let's see. And within a couple of minutes of tweeting it, I was like, uh-oh, he's going to wake up to a lot more followers. What was your reaction when you woke up?

• 7:19Speaker 02

  No, it's just like, oh, that's good, isn't it? Got a load of followers now. Initially, I thought some of just initially, I thought some of my YouTube channel just brought sub bots and stuff.

• 7:29Anthony Pompliano?

  Wait, you thought what happened?

• 7:31Speaker 02

  Like they had brought sub bots, you know, you could, um, buy fake followers and stuff. I thought so. Just brought me a load of fake followers.

• 7:40Anthony Pompliano?

  Okay. So when you woke up, you went to sleep, you had like 18 or 20 followers and you woke up to what 10,000?

• 7:46Speaker 02

  Um, I think it's like eight, 7,000 when I woke up and it was like every half an hour is gaining another 100 followers. It's pretty crazy. I mean, I turn my phone on in the morning. It's just like a constant stream of alerts coming from had to silence everything.

• 8:01Anthony Pompliano?

  That's awesome. And what, how many followers are you up to now?

• 8:05Speaker 02

  It's kind of steadied out now. It's kind of steady out around 90,500.

• 8:11Anthony Pompliano?

  Okay. So if we get you to 20,000, then that'll be a big win from, from, uh, 18 to 20,000, 18 followers to 20,000 followers would be a pretty big jump for you, right?

• 8:21Speaker 02

  Yeah. It's like, when you, when you compare it to like how many people there are, you know, just people in my school, it's a lot of thousands of people in my school. It was like 18 times as many as that following on Twitter. So it's a bit crazy when you think about it.

• 8:33Anthony Pompliano?

  For sure. And what did your parents say when, uh, when you told them that, uh, you had 20,000 followers on Twitter? Do they, do they understand what that means?

• 8:41Speaker 02

  Yeah. Yeah. My parents like made it pretty up to date. They're like, oh, wow. That's pretty good. How did that happen?

• 8:49Anthony Pompliano?

  I love it. And so what's the plan now? Are you going to keep creating videos and, uh, and you'll tweet them out or, or what are you kind of planning to do?

• 8:57Speaker 02

  Yeah. So at the moment it's just about, you know, making videos and then, you know, when I do, when I'm in the middle of research, I kind of just tweet that on Twitter.

• 9:04Anthony Pompliano?

  Got it. So you're 12. What else do you spend your time doing? Right? Your, your mom was here earlier. So everyone who, who's listening, uh, I made sure that his mom was fine with us, uh, talking and stuff, but what, what do you spend your time doing outside of, uh, investing? Do you go and play at the playground with your friends? Do you, uh, go to school? Do you read? Like what else are you doing?

• 9:26Speaker 02

  Yeah, so I go to school.

• 9:28Anthony Pompliano?

  Okay, that's good.

• 9:29Speaker 02

  Yeah, yeah. Oh, yeah, I meet up with my friends, you know, we mess around, you know. Have fun, go out to the parks and funs around their house. So, yeah. I do, I do that outside and, you know, when I get home, I don't, I'm not like, I'm not one of those people who immediately when I go home, it's like. Oh, well, it's like, well, as soon as I go outside school gate, it's like, see how the stocks are doing, then walk over my mate. Then get home and then, and then just, you know, um, just do normal stuff, I guess, like.

• 10:01Anthony Pompliano?

  So when, when school ends, the first thing you do is you check your stocks?

• 10:06Speaker 02

  Yeah, first thing.

• 10:08Anthony Pompliano?

  I love it. Uh, what, what are your favorite, uh, stocks right now, just in terms of the ones that you've covered and created videos on? Are there ones that specifically you're paying attention to?

• 10:18Speaker 02

  Yeah. So like, um, my biggest position at the moment is a stock called Archimota. It's quite, it used to be a penny stock, it went up sixty eight percent in one day. I've been about one hundred and sixty eight percent on it. So yes, I sold half my position, you know, and whatever, what, and I left all the profits into it. So I won't take some risk off the table.

• 10:38Anthony Pompliano?

  But what is that, what does that company do?

• 10:41Speaker 02

  Oh, so they produce freewheel EV vehicles. And you, and, you know, I like the CEO, you know, the, the vision's pretty good, you know, it's backed by Sandy Monroe. And he's going to help them scale up like fifty thousand vehicles a year. Company at the time I invested in it was worth a hundred and fifty million, that was going to quite sound like. Seven hundred million in revenue in four years. So I just figured, oh, this company's my, I might as well take a bet on this. It's what's it, it's something like, I, my average is five dollars and ninety one cents, it's up to sixteen now. So, yeah, I mean, but that's, that in, in a sense, that's parts that you just run up in EV sector in general, I mean. After your lecture, you've seen quite a nice bounce back in the, um, really the whole stock market.

• 11:22Anthony Pompliano?

  Awesome. And so when you think of your portfolio, is it 100% stocks? Do you have other things other than just kind of public equities? How do you think about investing?

• 11:33Speaker 02

  Yeah, so when you, when you live in the UK, it's slightly different. So at the moment, it's all stocks. So I've got some spare cash after I sold out of the main position, you know, half of it. So I also probably looked at like, I'm at, I don't know, like 5% into Bitcoin is like the crypto thing. And then just put the rest back into maybe IPOB or something, which I have a lesser position in.

• 11:54Anthony Pompliano?

  Got it. So you're a believer in Bitcoin?

• 11:58Speaker 02

  Yeah, I think it's like, I was tweeting this earlier. It's like, there's 21 million Bitcoins in the world, you know, loads of them are lost. And then you, and then you look at, obviously, the price difference is like 18,000 now. It's quite out there, but when you look at it, it's like a decentralized currency. You know, it's not controlled by the government. It's not controlled by anyone. That's really a sense like the government don't like it. But you know, people like, like it's not, it's not controlled by anyone. It's really in the hands of the people.

• 12:24Anthony Pompliano?

  Got it. And when you think about your portfolio, are you, you mentioned earlier, you're rebalancing. You're kind of treating this just like any other kind of hedge fund manager or professional investor would do, right?

• 12:37Speaker 02

  Yeah, I guess so.

• 12:39Anthony Pompliano?

  And where did you learn how to do that?

• 12:43Speaker 02

  You know, it's like, I just really like taught myself, you know, watched some YouTube videos. Now, at the start, I initially, I would say I knew nothing about investing at the start, you know? None of my parents are traders or anything. Nobody in my family was. And so I did, originally, I just bought, you know, when you kind of get an idea of who like everyone the famous is. So I just dumped some money into some of the famous companies and just learned from there. I mean, I think one of the, one of the first holdings in the portfolio was Berkshire Hathaway. It was like, within one week, I realized that all Warren Buffett invested in food companies and airlines that he was selling out of. So I sold that, put it into some UK stocks, sold that and finally found US stocks.

• 13:27Speaker 02

  And that was when I started making returns from there.

• 13:30Anthony Pompliano?

  Got it. And when did you start doing this? Was this something where like when the virus came around and the pandemic hit? That's when you started or were you doing this before the pandemic?

• 13:40Speaker 02

  I'd say when the pandemic hit, unfortunately, I wasn't, I didn't start when it was middle of the stock market crash. I would have made a whole lot of money then. I started around like four or five months ago, I'd say.

• 13:52Anthony Pompliano?

  Got it. And what platform do you use to trade on? Do you use one of the like new technology platforms? Or do you use like a traditional brokerage account?

• 14:00Speaker 02

  Yeah, so in the UK, Robinhood was gonna be here, but they decided not to launch. So I use basically the UK version of Robinhood at the moment, trading to on C and like zero commission all that. But I would say that the one problem is just like financial exchange impact. So you might be up like 1% on stock, but you're down on it because of the currency difference. But then at the same time, I'm not gonna pay like 10% of all the money I've spent to stop for one trade from a traditional brokerage account. So it works out pretty well.

• 14:31Anthony Pompliano?

  Zach, you realize how ridiculous it feels for me to be talking to somebody who's 12 years old and understands the foreign currency risk and the exchange risk that you're taking, right?

• 14:41Speaker 02

  Yeah.

• 14:44Anthony Pompliano?

  Alright, so you're, it looks like you're in your bedroom. Is that the headquarters of the Zach Cox Trading business?

• 14:53Speaker 02

  Yeah, I do more or less everything in here. You know, it's all on the, it's all on the phone which I'm using now. All the trades happen on that.

• 15:00Anthony Pompliano?

  Okay, you do everything on your phone?

• 15:03Speaker 02

  Yeah, all of it on my phone.

• 15:04Anthony Pompliano?

  What a legend. And is it just you? Or do you have anybody else who's helping you? Are you gonna plan to get more of your friends in? What's kind of the plan for the future?

• 15:15Speaker 02

  Yeah, well, like, I don't really have anyone who's helping me. I actually got my dad into it recently. I showed him how it was running. He was like, oh, I can do this. And my son's doing it. But yeah, so I got in, I hit into it. But yeah, I think like in the future, it's not really like necessarily persuading people though. I might put my link on my Twitter page and try and get some free free shares. I got a Snapchat free share, didn't hold it, and then it ran up 100%. So I just sold it and put it into some company which I may have lost like one pound on. I think if I get the Snapchat share, I would have made double money on it. But that was a pretty good free share. But I mean, I might put it on my Twitter or something and get some free shares. That's always good.

• 15:57Anthony Pompliano?

  Gotcha. I love it. Alright, so you're 12 years old now. I want to document this because you're obviously incredibly intelligent and ambitious. What do you want to do with your life, right? If we come back and we watch this video 30 years from now, what are you hoping to have accomplished by then?

• 16:16Speaker 02

  And like, I was saying like, thirty years. I, I, I, maybe be a fund manager. That's like the hope. Maybe one of the smaller fund managers manage like five million dollars or something. You know, that'd be pretty good, you know, being a fund manager, um, getting, getting the nice pay package, Richard comes in there.

• 16:34Anthony Pompliano?

  So wait, did, did you just say that maybe be a small fund manager with like five billion dollars?

• 16:39Speaker 02

  No, I didn't say that. But yeah, that'd be pretty cool. Five billion dollars. Like five billion.

• 16:47Anthony Pompliano?

  I love it. All right. Any last words for everyone? Um, we're gonna send, we're gonna link to your YouTube in the description. So everyone that's, uh, listening to this or watching it on YouTube, go check out Zach's YouTube page. Uh, he's literally smarter than ninety percent of the idiots on Twitter. Uh, so he's doing a pretty good job. But anything you want to say to everyone?

• 17:06Speaker 02

  Yeah, just like, um, if you, if you subscribe to my YouTube channel, I like greatly appreciate it. And keep on investing.

• 17:13Anthony Pompliano?

  All right. So we're gonna send people to your YouTube. We're gonna send people to Twitter. And if they have questions, if they tweet at you, you're pretty active on Twitter now, right? So you'll, you'll try to your best to answer everybody?

• 17:23Speaker 02

  Yeah.

• 17:24Anthony Pompliano?

  Awesome, man. All right. Listen, thank you so much for doing this. You are, uh, you're a legend in the making, my friend. So this is gonna be fun.

• 17:31Speaker 02

  Yeah, hopefully. I'll try it a little bit.