Amid arranging his prom date, lacrosse practice and getting homework done, teenager Cole Mattox launched a hedge fund out of his bedroom in suburban Montclair, New Jersey.
Mattox founded North Tabor Capital in March 2017 when he was 17 years old. Now, Mattox is 18, graduating from Seton Hall Preparatory School and headed to University of Pennsylvania's Wharton School of Business undergraduate program in the fall.
The young financier can't say who his clients are or how much they invested for legal and privacy reasons, but he says he has more than one and fewer than five clients in his hedge fund. They are all SEC accredited investors, says Mattox (which means they are making more than $200,000 year or $300,000 together with their spouse or have a net worth of more than $1 million excluding the value of their primary home). Mattox says he has over six figures in assets under management and, though he declined to disclose how much he is making running the fund, he says he does "pretty well" for a teenager.
Mattox has wanted to work in finance from a very young age. "Actually you know when I was in middle school they asked on a career day, 'What does everyone want to be?' And there are the typical answers of policemen, firefighter, professional athlete. And I actually wrote investment banker," Mattox tells CNBC Make It from his bedroom and office. "So that's where I am."
Mattox's 'prom-posal,' the ritual of asking your date out to prom.
Mattox started learning about finance from his uncle who worked in mergers and acquisitions at Goldman Sachs. He's also proactively taught himself about the world of finance.
Mattox's father, Ted, remembers his son asking for a subscription to The Wall Street Journal when he was 15. Ted Mattox has his own production, event management and multimedia consulting business, Black Forest Multimedia. His mom, Kuae Mattox, who is an editorial producer at CNN, says Cole also asked for finance books, including technical books about algorithms and trading.
"He was so serious about getting this going and so passionate about it, I came to really believe that he was going to get this up and running and keep it going," says Kuae. "He spends long nights, kind of every waking moment doing what he can to learn as much as he can he is really self-taught."
Mattox would often burn the midnight oil educating himself.
"I also discovered some nights when I thought he was in bed, he was actually watching TED talks in bed, under the covers or or he was just up late you know reading something or watching something so he could learn something new," says his mom. "In the middle of the night you walk in his room and he's testing trading strategies — which is, like, a little weird for like a 17-year-old," says his dad.
It's his curiosity that has made Mattox successful, according to his own analysis. "I think I'm a pretty normal kid beyond the fact that I read a lot and talk to financial professionals and executives from some really interesting companies who have been kind enough to mentor me along the way," he says.
"Principles," by the Bridgewater founder and investing impresario Ray Dalio, is "one of my favorite books," says Mattox.
He rattles off a couple other finance books he likes: "Black Edge: Inside Information, Dirty Money, and the Quest to Bring Down the Most Wanted Man on Wall Street" by Sheelah Kolhatkar; "Capital in the Twenty-First Century" by Thomas Piketty; and "Why I Left Goldman Sachs: A Wall Street Story" by Greg Smith. He reads classical politics and philosophy books too, he says. For example, he's a fan of the 17th century English philosopher John Locke.
The summer after his sophomore year in high school, when he was 16, Mattox participated in the All Star Code program, a six-week program hosted at Goldman Sach's New York office, which teaches computer science and leadership skills. That program gave him not only foundational technical skills, but also the confidence that he could take on such a challenge, his parents observed.
In addition to reading a lot, Mattox educates himself by reaching out to financial professionals he met during his summer working at Goldman Sachs and by getting references from those people to speak others. Mattox also follows up with family connections, he says.
Mattox also reached out and spoke with another young financier, Jacob Wohl, who today is only 20 years old, according to Wohl's LinkedIn profile. Mattox has spoken with Wohl on the phone and met him in person once when he was out in Los Angeles. Wohl is now one of the members of the Mattox's Board of Advisors. (Update as of November 2018: Mattox is no longer associated with Wohl.)
Mattox decided if he could launch a hedge fund in high school, it might help him impress college admissions officers.
"It looked great on a college application," Mattox says to CNBC Make It about his decision to launch North Tabor Capital. Indeed, he wrote his main common application college essay about the process of launching a hedge fund. "I decided it was a wonderful way to not only make money, it looked very impressive, you know, considering I wanted to work in finance when I was older. It looked like something that was just right for me and a great way to get experience."
Also, he says, he realized he was good at trading and managing finances. "It does excite me and I enjoy math and statistics, but at the same time, like, I found something that I was good at," says Mattox. "It was something I was good at first and then I sort of learned to love it later."
Mattox doesn't solicit his hedge fund — investors reach out to him. "Everyone who is invested in the fund reaches out to me first. I don't actually actively pursue anyone," says Mattox. His first investor was a family friend who knew about his ambitions. From there, "it's all by word of mouth." All of his clients are friends and family, says Mattox.
His parents, though, are not clients. "We don't have enough money to invest in Cole's hedge fund. Hopefully when we grow up, we will be able to have enough money to invest, but I think he has a minimum investment amount and we have three kids," says Mattox's mom, Kuae.
Running a hedge fund at 17 or 18 years old means managing his client relations around homework, but it also means talking carefully with investors about why he is qualified to shepherd their cash through the markets.
"The hardest part up to this point was having people take me seriously and realize that I'm not kidding," says Mattox. "Some people have been tremendously supportive and have been, you know, in awe in regards to what I'm doing, but other people have been quick to discount me, so that's definitely been the hardest part."
One of the first people Mattox ever told he was going to start a hedge fund now works in compliance at a large bond fund and was a former financial lawyer. "And he looked at me and legitimately laughed in my face, and he's like, 'OK maybe when you're 40 and have an M.B.A. and have been working for 20 years,'" Mattox says.
Even his own mom didn't take Mattox seriously when he first broached the idea of starting a hedge fund. "I think Cole was around 16 years old when he first told me that he was going to start a hedge fund and quite honestly, I laughed. I thought it was funny. I thought it was a joke and I said, 'Oh! That's great that's what you want to be when you grow up,'" Kuae says. "And he looked at me very seriously and he said, 'I don't think you understand what I'm saying to you. I'm I'm getting ready to start a hedge fund.' And I said, 'You're so funny, you're so funny,' but he was dead serious. And now, I guess I'm not laughing."
When he does talk to a potential client, Mattox lets his knowledge of the markets lead the conversation. "Getting people to invest with me is certainly an interesting conversation since I'm only 18 years old. I usually talk to them about my past track record, what my outlook is for the market and what I hope to do in the future, as well," Mattox says. "And I sort of articulate my strategy and what I do on a day to day basis."
Because he only has a small number of clients, Mattox is able to accommodate the specific needs of each person. "It's very bespoke," says Mattox. "We, you know, tailor to clients needs and sort of trade the types of products that they want to be traded."
In May, Mattox hired one other North Tabor Capital team member: Kai-Sigurd Jensen. Also from Montclair, Jenson is an old friend and talks with Mattox about cryptocurrency and equity derivatives strategy. Jenson, who has the title Managing Director, just finished up his freshman year of college at St. Lawrence University.
Though it's summer now and Mattox has more free time, getting through the school year while running a hedge fund was challenging. "Running a hedge fund in high school was quite stressful," says Mattox.
In addition to playing lacrosse, Mattox was taking six AP (advanced placement) courses his senior year and he was in numerous clubs and organizations — he's in the National Honor Society, the Math Honor Society and the Chinese Honor Society, and he works with Wounded Warrior Project, his high school's Peer Leadership and community service organization Knights of Setonia. He monitors the stocks in his portfolio during the day and checks in with each client everyday or every other day.
During school, Mattox says he woke up at 5:30 a.m. (sometimes with some help from dad, he and his parents say), used his free periods during the school day carefully and did some multitasking. "Even though I have a class with the market open, they do let us go on our laptops in class, so I'm not always doing schoolwork admittedly," says Mattox.
When he was not in season for lacrosse, Mattox would get home from school at 3:15 p.m. to watch the market close and analyze what happened during the trading day. He would do homework for an hour or two after that and follow up his schoolwork with calls and emails to clients. When he had school, he would go to bed between 10:30 and 11 p.m. and Friday and Saturday nights he might go to dinner with friends, he says.
Mattox says he's developed his work ethic from watching his parents. "I normally get my motivation from my parents, seeing how hard they've worked, seeing how much they've sacrificed for me to be in the position that I am today," says Mattox.
Mattox is studying for his Series 65 finance exam, which he hopes to take before he goes off to Wharton, and, if he passes, it would accredit him as a licensed portfolio advisor. He plans to keep North Tabor Capital going when he gets to college.
"Yes, at University of Pennsylvania I hope to continue running my hedge fund, hopefully expand. Obviously, it's a wonderful place to do business and there are many you know people from the financial industry who have done very well after leaving there so hopefully during my four years I can not only continue to run it but also expand."
Mattox is going to University of Pennsylvania's Wharton School of Business undergraduate program in the fall.
Mattox will buy himself food when he's out, but otherwise he reinvests the money he makes running North Tabor Capital.
"The compound interest formula is a very powerful thing," says Mattox. "Yeah, so it would be tempting to spend some of my money but at the same time I look at the future and look at you know how well I'd like to do then and realize that a lot of the things temporarily that I would want now I probably would not you know appreciate just as much as I would in the future."
He did buy himself a pair of "nice shoes," but they didn't make much of an impact. "I think they were in Jordan fives," says Mattox. "I bought them, and I was like, 'These are cool!' I wore them twice and then I was like, 'Oh, okay, that's enough!'"
The young financier says he wants to retire early and devote the rest of his life to giving back in one way or another. "I envision myself hopefully retiring at 40 and then dedicating the rest of my life to public service, whether it be charities or elected office," says Mattox.
Mattox has met Senator Cory Booker and New Jersey Governor Phil Murphy. He also met Barack and Michelle Obama. Mattox's mom is the national president of the organization for mothers of color, Mocha Moms, which partnered with the Obama Administration, so Mattox got to attend the last Holiday Party of the Obama Administration, the Easter Egg Roll, the Mother's Day tea and the Papal arrival ceremony. "I've met absolutely wonderful politicians and business leaders, and they've inspired me to you know at some point in my life give back to the people who were so helpful to me early on," says Mattox.
It was at a White House event that Mattox met the TaskRabbit CEO, Stacy Brown-Philpot, who is now on the fund's Board of Advisors, and who wrote the young financier a letter of recommendation for the University of Pennsylvania, her alma mater. (Brown-Philpot confirmed to CNBC Make It that she both is a member of Mattox's board and that she wrote him a letter of recommendation.)
"When I first met Cole, we talked about sports, going to college and his plan to start a hedge fund. The first two topics are normal topics for teenagers, but the fact that he planned to start a hedge fund was impressive. Cole's entrepreneurial spirit is striking," Brown-Philpot tells CNBC Make It via email. "In the time I have known him, he has impressed me with his ability to be creative and challenge himself to do the harder thing. I'm proud of Cole and all that he has accomplished in such a short period of time."
Mattox's mom says her son has an intense drive. "Once Cole kind of fixates on something, he doesn't let it go," says Kuae. "And that goes for just the mundane things that he wants, you know, materially, but also the things that he wants in terms of his career and professionally. He seems to kind of glom on to something and it's an idea that he talks about, he might obsess about it a little bit, but he just he just doesn't let it go because he wants to make it happen so badly."
And Mattox says his persistence has a lot to do with his achieving so much at such a young age too.
"The secret to success is work hard and never take no for an answer. When people think you can't do it you need to prove them wrong," he tells CNBC Make It.
That doesn't mean he hasn't doubted himself along the way.
"I've had tons of those moments, especially early on — you know, whether you know be something as simple as a brokerage application or looking at a trade that went wrong for reasons that I just didn't understand. There have been tons of moments that I doubted myself," says Mattox. "But, you know, up to this point everything's worked out for the better, and I am extremely excited for what's to come in the future."
— Video by Mary Stevens
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