David Kotok, a veteran financial advisor, founded his firm, Cumberland Advisors, in 1973
David Kotok, a veteran financial advisor, founded his firm, Cumberland Advisors, in 1973 AFP / TIMOTHY A. CLARY

Investment advice from financial managers generally follows a predictable template: Update clients on the economy and stock market, endorse long-term investing -- and avoid hot-button topics.

David Kotok, a veteran financial advisor, takes a different approach, mixing in deep dives on gun control, the First Amendment and other political issues with discussions of stocks and bonds.

An outraged Kotok blasted Donald Trump last month after the US president said four non-white US Congresswomen should "go back home" and led a rally where his supporters chanted "send her back" against Democratic Representative Ilhan Omar, who is Muslim.

"Send them back" is "an affront to everything our great nation stands for," Kotok wrote in a July 24 note for his firm, Cumberland Advisors, that bemoaned a culture "inundated by political trash" and excoriated Trump's relentless personal attacks on Federal Reserve Chair Jerome Powell.

In an interview, Kotok said his disagreements with the president stem originally from economics.

Millions of jobs remain unfilled because of Trump's restrictive immigration policies, Kotok argues, limiting the economy's ability to grow.

And businesses are deferring key investments because of uncertainty aroused by Trump's swerves on trade and use of punitive tariffs, he said.

But Kotok also had harsh words for Trump's overall conduct in office -- criticism that is common in entertainment, academic and some other circles, but rare in the financial world.

"In a civil democratic society of the type we like to have, you have to have diverse views and you have to permit them," Kotok, 76, told AFP.

"And you have to be prepared to debate them and you don't have to use personal, negative, racist forms of attack that are directed at ethnic composition."

Kotok said he disagreed with the politics of Omar and the other three Democratic lawmakers, but respects their service to the country and believes Trump's attacks degrade public discourse.

"What troubles me is we are becoming worn down by this recurring type of ugly, nasty, directed rhetoric from the president," Kotok said.

"He hurts himself doing it. He hurts the country he serves doing it. He encourages others to do it."

Rare voice in 'one percent'

Friends and business associates of Kotok say he has always been outspoken.

"Most people in this business are afraid of their shadow and they go to great pains to say nothing, but David's not like that," said Jim Bianco, who runs his own economic research firm.

The two men have known each other for more than a decade and Bianco says Kotok was also tough on former president Barack Obama.

A senior employee of a large commercial bank who said his position bars him from speaking on political topics praised Kotok for showing "courage" in speaking out.

"I don't think he's a lone voice, but it's just that this stuff doesn't usually come from the one percent," the banker said. "He's a very civil person in a world where civility is lacking."

John Silvia, the former chief economist for Wells Fargo and a longtime friend, said Kotok straddles the investment and "big ideas" worlds and that his success as a money manager has afforded him freedom.

"David has his own clients and perhaps his clients appreciate his frankness on a lot of these different issues," Silvia said, adding that even if clients disagree with Kotok on politics, they "keep him around."

Kotok said he has on occasion lost clients who disagree with his views, but also hears from associates who are eager for him to address the issue du jour.

"Because I'm independent and an old curmudgeon, I am not afraid of Donald Trump," he said.

A native of New Jersey, Kotok co-founded Cumberland in 1973 after raising a few million dollars from friends and family, a rocky period that included oil shortages, spiking interest rates and the Watergate political crisis.

He attributes the firm's early success to a decision to buy fully into the stock market as it bottomed, figuring the US would recover.

The firm, based in Sarasota, Florida, now has 45 employees and manages more than $3 billion in assets through fixed income portfolios and exchanged traded equity funds.

Each August, Kotok organizes a retreat for about 50 people in the Maine woods where financial professionals, journalists and executives fish, drink fine wine and debate monetary policy, trade and other issues.

Kotok rues the bland public statements from investment banks and trade associates that are "antiseptic" versions of the angry, frustrated comments he hears in private.

He understands why individuals on Wall Street won't speak out, but said leaders of corporate America in general are "abrogating their responsibility" when they don't.

"Society loses because it doesn't have the benefit of thoughtful debate," he said. "And if society loses, then everybody in it loses and instead gets 30-second soundbites about 'fake news.'"