This week, we speak with David R. Kotok, who is co-founder, chairman and chief investment officer of Cumberland Advisors, which has $4 billion in assets under management. Kotok is also a director at the nonprofit Global Interdependence Center, which promotes free trade and international dialogue, and has authored or co-authored four books, including “From Bear to Bull with ETFs” and “Adventures in Muniland: A Guide to Municipal Bond Investing in the Post-Crisis Era.”
We discuss his recent research is on the economic consequences of pandemic shocks; he looks at antiquity, Middle Ages, and the 20th century forward, and discovered some surprising similar economic sequences. The challenge was finding economic data, much of which was buried in economic books, but needed to be correlated with pandemic health documentation. He did that via historical economic data from Sidney Homer’s History of Interest Rates, Allan H. Meltzer’s A History of the Federal Reserve, Volume 1: 1913-1951, and Milton Friedman’s A Monetary History of the United States, 1867-1960.
The parallels are many: After an initial shock, labor supply falls (due to death and disability), which sends wages higher. Reallocation leads to a productivity gain; Interest rates end up falling, and transitory inflationary hits. We still have yet to fully comprehend how much the pandemic has changed society and the economy.
The risk going forward is virus mutations developing, primarily in unvaccinated hosts. He also explains how Long Covid is going to impact financial markets.
A list of his favorite books is here; A transcript of our conversation is available here.
You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.
Be sure to check out our Masters in Business next week with Michelle Seitz, Chairman and Chief Executive Officer of Russell Investments, the 6th largest manager in the world. The firm manages over $331. billion in assets and advises on another $2.8 trillion.
David Kotok Favorite Books
History of the Peloponnesian War by Thucydides
Written on Water: Characters and Mysteries from Maine’s Back of Beyond by Randy Spencer
The Man In Milan by Vito Racanelli
David Kotok’s Authored Books
From Bear to Bull with ETFs by David Kotok and Talley Leger
Lessons from Thucydides by David Kotok
Adventures in Muniland: A Guide to Municipal Bond Investing in the Post-Crisis Era by Michael Comes, David Kotok, and John Mousseau
Invest in Europe Now!: Why Europe’s Markets Will Outperform the US in the Coming Years by David Kotok and Vincenzo Sciarretta