David Kotok and Bond-Market Alpha

Barry Ritholtz is a Bloomberg View columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He blogs at the Big Picture and is the author of “Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy.”
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This week on our Masters in Business radio podcast, we speak with David Kotok of Cumberland Advisors.

Kotok co-founded the firm, which now manages $2.3 billion, in 1973. He discussed why it's easier for actively managed bond funds to deliver market-beating returns, or so-called alpha, than for actively managed equity funds. He traces it to greater volatility in bonds. Kotok, who was in the World Trade Center on Sept. 11, is the author of four books, including the bestselling “From Bear to Bull with ETFs” and the forthcoming “Adventures in Muniland.”

The full podcast is available on iTunesSoundCloud and Bloomberg. Earlier podcasts can be found on iTunes and at BloombergView.com.

Next week we speak with Howard Marks, co-founder of Oaktree Capital Group.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author on this story:
Barry L Ritholtz at britholtz3@bloomberg.net

To contact the editor on this story:
James Greiff at jgreiff@bloomberg.net