David Kotok on When History Meets Markets: Geopolitics, Civility, and Capital
In this wide-ranging conversation, Jonathan Treussard sits down with David Kotok—co-founder of Cumberland Advisors (1973) and architect of the annual Camp Kotok retreats—to explore how family history, economic paradigms, and behavioral finance shape investment thinking. David traces his path from working 10 years in his family's New Jersey grocery store (better education than three Penn degrees, he claims) to becoming a "quote boy" at age 11, chalking stock prices on blackboards at his grandfather's brokerage office. His Ukrainian immigrant great-grandfather David Kotok opened a corner grocery in 1907; ancestors who didn't escape faced persecution under czars, Stalin's Holodomor, and now Putin.
The conversation centers on David's latest book The Fed and the Flu, co-authored over four years after reading a San Francisco Fed paper identifying 19 pandemics across 800 years—all following the same economic trajectory without exception. Pandemics create rising per-capita wealth and productivity as capital concentrates and least-productive fields lie fallow, driving neutral interest rates down. War finance does the opposite: debt-financed consumption (tanks that become obsolete or get blown up) with productivity gains coming later, driving neutral rates up. We're now transitioning from pandemic to war economics globally—trillion-dollar defense budgets, expanding deficits, and what David calls "masked men incarcerating people" as a new army form.
David discusses Camp Kotok's evolution from weekend fishing trips to influential gatherings attracting millions via CNBC and Bloomberg coverage, the dangers of illiquidity in 401(k)s as private equity enters retirement accounts, and why time horizon determines everything in investing. He reflects on 9/11 (he was in the World Trade Center plenary session), measuring flash-to-bang time from artillery training in 1966, and his definition of life well-lived: more wins than losses, limiting losses harder than maximizing gains, not repeating mistakes, and aging graciously with civility in a world increasingly dominated by haters.
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What We Cover in This Conversation
Family history: Ukrainian immigrant great-grandfather, grocery store education, grandfather's brokerage office
The Fed and the Flu: 800 years of pandemic economics vs. war finance
Why every pandemic drives neutral rates down, every war drives them up
Camp Kotok: from fishing weekends to influential policy gatherings in Maine
Transitioning from pandemic to war economics: global defense spending and deficits
Illiquidity risks: private equity in 401(k)s and why liquidity is like oxygen
Time horizons: Harvard's 400 years vs. an 82-year-old's short lens
9/11 experience and flash-to-bang time from World Trade Center explosion
Civility in finance: catching flies with honey, not vinegar
Life lessons: limit losses, don't repeat mistakes, age graciously
Key Takeaways
Pandemics and wars create opposite economic trajectories that repeat throughout history without exception. Analysis of 800 years (19 pandemics from Black Death to COVID) using Bank of England data reveals pandemics concentrate wealth per capita (poor inherit from poor, rich from rich) and raise productivity per capita (least productive fields lie fallow), driving neutral interest rates down. War finance—whether catapults, tanks, or drones—consumes capital through debt-financed obsolescence with productivity gains coming only later, driving neutral rates up. We're now transitioning globally from pandemic to war economics with trillion-dollar defense budgets and expanding deficits.
Liquidity is like oxygen—you don't miss it until you need it. The push to allow private equity in 401(k)s ignores basic reality: stocks and bonds convert to cash in seconds; private equity deals don't. When someone gets sick and needs to liquidate retirement accounts, illiquid positions create existential problems. The assumption that "these assets will never be touched anyway" dismisses unintended consequences for people who actually need cash. Even Harvard with its 400-year horizon learned the hard way that breaking the piggy bank requires planning.
Time horizon fundamentally determines investment lens and risk tolerance. Harvard University with 400 years of history views risk differently than a family office planning for two generations, which differs entirely from an 82-year-old who's provided for family. Until recently, suggesting Harvard needed liquidity discipline would get you removed from the foundation board—now that reality has changed. Understanding your actual time horizon, not aspirational one, is critical for matching portfolio construction to real-world constraints.
Disruption requires changing rules, not applying old paradigms to new realities. When moving from stasis to rapid change—tariff wars, rising defense budgets, fear in hospitality workers, reversing 40 years of positive interdependencies—applying investment rules from the prior system means "eating with the fork instead of the spoon" and spilling on your shirt. Flexible mental models beat over-optimized mechanical models when paradigms shift. The interdependency that reduced barriers and expanded trade now operates in reverse, and portfolio shepherds must adapt or fail.
Professional success requires more wins than losses, but limiting losses matters most—and avoiding repeated mistakes is hardest of all. No one achieves 100% batting average. The retrospective lesson from Livermore onward: make new mistakes, don't repeat old ones—though this is "very difficult" because we're human. Aging graciously while forces work against you, maintaining civility when haters dominate discourse, and growing older with patience and grace define life well-lived beyond mere financial returns.
Timestamps
00:00 - Welcome and introduction: grocery store education and grandfather's brokerage
04:00 - Family history: Ukrainian immigration, Spanish expulsion, multiple persecutions
08:00 - Churchill on studying history and The Fed and the Flu origin story
10:00 - Pandemic economics: per-capita wealth and productivity drive neutral rates down
15:00 - War finance: debt-financed consumption drives neutral rates up
19:00 - Camp Kotok: evolution from fishing weekends to influential policy gatherings
25:00 - Mechanics, psychology, purpose framework for investing
27:00 - Illiquidity dangers and private equity in 401(k)s
30:00 - Time horizons: Harvard's 400 years vs. individuals saving for death
35:00 - Life well-lived: limiting losses, not repeating mistakes, aging graciously
37:00 - Rapid-fire questions: yes/no, Mozart, explosions, parsley, God admitting mistakes
About David Kotok
David Kotok co-founded Cumberland Advisors in 1973 and served throughout his career as Chief Investment Officer, CEO, and Board Chairman. He now serves as Strategic Advisor. Cumberland Advisors' acquisition by Mid Penn Bancorp was announced in September 2025, with closing expected by year-end. His commentaries have been cited in The New York Times, Wall Street Journal, and Barron's, and he is a regular contributor to Bloomberg TV, Bloomberg Radio, Yahoo Finance, and other major media outlets.
David holds a BS in Economics from the Wharton School and dual master's degrees from the University of Pennsylvania in Organizational Dynamics and Philosophy. He served in the U.S. Army (1966-1969), assigned to a preventive medicine unit where he developed his appreciation for public health. He has authored or co-authored five books, most recently The Fed and the Flu: Parsing Pandemic Economic Shocks (February 2025, thefedandtheflu.com), which examines 3,500 years of pandemic and war economics. His other works include From Bear to Bull with ETFs, Adventures in Muniland, and monographs on Lessons from Thucydides and the Zika virus.
David served as Program Chairman of the Global Interdependence Center (GIC) and currently serves on its Advisory Council and College of Central Bankers Advisory Board. He organized five-continent central banking dialogues across Cape Town, Hong Kong, Hanoi, Milan, Paris, Prague, Rome, Santiago, Singapore, Tallinn, and Zambia, earning GIC's Global Citizen Award. In partnership with GIC, he hosts Camp Kotok—annual retreats in northern Maine near the Canadian border that have become influential gatherings for economists, central bankers, policymakers, and investors, covered extensively by CNBC, Bloomberg, and major financial press. He is also a supporter of the CDC Foundation, particularly its climate change and public health initiatives.
Learn more at davidkotok.com and thefedandtheflu.com
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Disclaimer
The content of "Treussard Talks" is for informational and educational purposes only and should not be considered financial advice. The views expressed are those of the host and guests and do not necessarily reflect the opinions of Treussard Capital Management or its affiliates. Consult your own financial advisor before making any investment decisions. For full disclosures, visit treussard.com.