The Pomp Podcast - #435 Zach Cox the 12-year old Trading Wonder

Episode Date: November 20, 2020

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

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 and public companies. The content is 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. 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. 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.

all right guys bang bang i've got a special treat for you today i have a 12 year old on the podcast which uh is not probably what anyone is expecting but i've got a zach here with me thanks for doing this man no thank you for getting me like twitter famous i guess. So let's start with this. Uh, you live in the UK, right? Yeah. All right. And what do you do all day? Because, uh, 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? It's just like, you know, I, you know, when you're on YouTube and stuff, you always get a load of adverts. I'm like my, like my broker at the moment running a massive advertising

campaign one time I was everywhere I just thought I'd put four like 40 quid into it just see how see how it went originally I just started doing like the UK stock market and stuff that didn't go to where was 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 the way. At my peak, I'd be up like 70% on my portfolio. Literally, it was like it went all the way down to like 1% loss.

It's gone all the way back up to 65%. You know, it's like I've just like seen it all now. So, okay. So, you've got a portfolio that you're looking after, right? Yeah. And what are your friends doing? So, at 12 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 where does your interest in kind of business and investing come from I got my friends into investing he only invests a little bit

he's kind of into it he thinks it's quite fun I think he just wants to get his money for his new PS4 at the moment I don't think he thought that would be a good idea like with my friends don't really talk about it that much we just like mess around and stuff 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 no I just film it on my little my little crummy little tablet because 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 ujo i was like oh this is what you get for buying a 60 pound tablet with the camera footage but yeah so ujo would just use my dad's but yeah it's been pretty good 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 yeah so like with most some a lot of my videos it's already sucks already owned i just talk about those kind of stocks i mean i mean a lot of these videos these have just been companies i've been just reading about watching interviews about you know watching clips from you know reading invested presentations like three weeks before that and then i just think i'll just upload it onto my youtube channel it's like my latest one ipob which is one of the tremendous ones

i had researched that for about a week before that watch some interviews on cnbc and yeah that's then i just thought i might as well make a video about it 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. Yeah, basically. Yeah, that's awesome. So, all right, let's talk about what happened the other night. So you basically, um, it looks like you had been using Twitter to try to distribute the videos, um, and also reach out to people and say you know hey chamath or others uh will you allow me to interview you or will you check out

my videos right yeah all right and so chamath responded to you maybe uh 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 yeah it is quite interesting because he said that but he didn't leave an email for us in an email so maybe that's little way of getting out of those something but i like giraffe he's good i'll give you his email and uh and then that's part of the challenge i think is that you gotta go find the email to see how resourceful you are yeah scrolling through a list of different ones okay and so that happens and so uh jim and a couple of other people basically said hey this kid's pretty smart like

we should see if we can help them out a little bit. Um, and so when Jim sent me the, uh, 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. Uh, and so I told Paulina, my wife, I said, uh, you know, I'm going to tweet it and maybe he wakes up to some more followers, but like, let's see. Um, and within a couple of minutes of tweeting it i was like uh-oh he's gonna wake up to a lot more followers what was your reaction when you woke up no it's just like oh that's good isn't it got a lot of followers now initially i thought

something just initially i thought some of my youtube channel just brought sub bots and stuff wait you thought what happened 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 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 um i think it's like eight seven thousand when i woke up and it was like every half an hour i was gaining another hundred 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 how to silence everything that's awesome and what how many followers are you up to now it's kind of steadied

out now it's kind of studied out around 19,500 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 yeah it's like when you when you compare it to like how many people there are you know just people my school it's for a thousand people in my school because like 18 times as many as that follow me on twitter so it's a bit crazy when you think about it 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 yeah yeah my parents think it's pretty up to date they're like oh wow that's pretty good how did that happen i love it and so what's the plan now

you're going to keep creating videos and uh and you'll tweet them out or what are you kind of planning to do yeah certainly it's just about you know making videos and then you know when i do when I'm in a little research I kind of just tweet that on Twitter got it so you're 12 what else do you spend your time doing right your your mom was here earlier so everyone who's listening uh I made sure that his mom was fine with us uh talking and stuff but 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 yeah so I go to school yeah okay that's good you yeah yeah i yeah i meet up with my friends you know we mess around you know have fun go up to

the park sometimes around their house so yeah i do i do that outside and then you know when i get home i don't know i'm not like i'm not one of those people who immediately when i go home it's like well well it's like well as soon as i go outside school gate it's like see how the stocks are doing then walk home with my mate then get home and then and then just you know um just do normal stuff i guess like so when when school ends the first thing you do is you check your stocks yeah first thing 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 yeah so like um my biggest position at the moment is a stock called arkamoto it's

It used to be a penny stock. It went up 68% in one day. I've been about 168% on that. So, yes, I sold half of my position, you know, and whatever, I left all the profits into it. So I won't take some risk off the table. What does that company do? So they produce freewheel EV vehicles.

And, you know, I like the CEO. You know, the vision's pretty good, you know. It's backed by Sandy Monroe. um he's going to help them scale up like 50 000 vehicles a year the company at the time i invested in it was worth 150 million that was going to equate to something like 700 million in revenue in four years so i just figured all this companies might i might as well take a bet on this it's what's that it's like my average is five dollars and 91 cents that's 16 now so yeah i mean but that's in a sense that's parts of you just run up in ev sector in general i mean after the

seen quite a nice bounce back in the um really the whole stock market awesome and so when you think of your portfolio is it 100 stocks do you have other things other than just kind of uh public equities how do you think about investing yeah so when you when you live in the uk it's like different so at the moment it's all stock so i've got some spare cash after i sold out of the main position you know half of it so i would say i probably look at like i don't know like five into Bitcoin as like the crypto thing and then just put the rest back into maybe IPOB or something which I have a lesser position in. Got it, so you're a believer in Bitcoin? Yeah I think it's like, I tweeted this earlier, it's like

there's 21 million bitcoins in the world, you know, and loads of them are lost and then you look at, obviously the price of it 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 set side of government they like it but you know people like like it was not it's not controlled by anyone it's really in the hands of the people got it and when you think about your portfolio uh are you you mentioned earlier you're rebalancing you're kind of treating this just like any other uh kind of hedge fund manager or professional investor would do right yeah i guess so and where did

you learn how to do that you know it's like um i just really like taught myself you know watch some youtube videos you know at the start i initially obviously i knew nothing about investing at the start you know none of my parents are traders or anything nobody in my family was um so i did i originally i just thought 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 port phillips was berkshire halfway it's like within one week i realized that all warren buffett investors and food companies and airlines were selling out of so i sold that put it into some uk stocks sold that and finally found

u.s stocks and that was when i started making returns from there got it and when did you start doing this was this something where like when the virus um came around and the pandemic hit that's when you started or were you doing this before the pandemic i'd say when the pandemic hit i'm unfortunately i wasn't i didn't start when it was middle of the stock market crash so i would have made a whole lot of money then i started around like four or five months ago i'd say got it and what platform do you use to trade on do you use one of the like uh new technology platforms or do you use like a traditional brokerage account yeah so in the uk robinhood was going to be here but they decided not to launch so i use basically the uk version of

robinhood at the moment trading to on seda like zero commission all that i would say like the one problem is just like financial exchange impact so you might be up like one percent on stock but you're down on it because of the currency difference but then at the same time I'm not going to pay like 10% of all the money I've been to stop to one trade from a traditional brokerage account. So it works out pretty well for me. 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? Yeah. All right.

So it looks like you're in your bedroom. Is that the headquarters of the Zach Cox trading business? Yeah, I do more or less everything in here. It's all on the phone, which I'm using now. All the trades happen on it. Okay. You do everything on your phone? Yeah, all of it on my phone.

What a legend. And is it just you, or do you have anybody else who's helping you? Are you going to plan to get more of your friends in? What's kind of the plan for the future? 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 much money I was making he was like oh I can do this and my son's doing it but yeah so I got him 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 made lost like one pound on because if i get a snapchat share i would have made double money on it but that was a pretty good free share but i mean i might put that on my twitter or something get some free shares that's always good gotcha i love it all right 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 if we come back and we watch this video 30 years from now, what are you hoping to have accomplished by then?

And like, I would say in like 30 years, I maybe be a fund manager. That's like the hope. Maybe one of the smaller fund managers managed like $5 million or something. You know, that'd be pretty good. You know,

being a fund manager, um, getting, getting the nice pay package, which comes with it. So wait, did you, did you just say that maybe be a small fund manager with like $5 billion?

no i didn't say that but yeah that'd be pretty cool five billion dollars i love it all right any last words for everyone um we're gonna send it 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 90 of the idiots on twitter uh so he's doing a pretty good job but anything you want to say to everyone yeah just like if you subscribe to my YouTube channel

I like greatly appreciate it and keep on investing all right so we're going to send people to your YouTube we're going to 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 try your best to answer everybody yeah awesome man all right listen

thank you so much for doing this you are you're a legend in the making my friend so this is going to be fun yeah hopefully I'm sure it will be