October 4th, 2025

This report is for the third Quarter ending September 30th, 2025. Stock prices rose, the Standard and Poor's 500 climbed 8%, the Nasdaq composite was 11% higher and the Russell 2000 measured a 12% gain. The Cloak composite returned 15% for the three month period. Interest rates are moderately lower; the ten year Treasury now yields 4.11%. Crude oil has fallen to $61 a barrel but gas prices are stubbornly high. Bitcoin and Gold prices are up 7.5% and 15% respectively, both seeing all time highs. Residential real estate is softening but new home sales are up dramatically. Second quarter Gross Domestic Product, a measure of the overall economy was very high at 3.8% annualized growth, however Government economic numbers are suspect and volatile due to tariffs and now a temporary shutdown.

It's rutting season and there is lots of head butting going on in Washington D.C., the Federal Government is completely enamored with itself. Every speech is comprised of unending superlatives and absolutes. It's the greatest period in American history, no wait, it's the end of Democracy. It's a real cat fight lady's and gentlemen and now once again the Government is shutting down. Yawn, pass the cereal please. A dreamscape, a utopian for the American investor has emerged. The new Sovereigns are the safe havens. Mega corporations with revenue and balance sheets that are larger than most countries of the world. As the politicians' dicker, they become less productive, that means less regulating, less meddling with us and our investments. Tariff revenue is very large. Speculation that a budget surplus may have just occurred certainly indicates that we are headed in the right direction and fast, as regards the country's finances. One must be an optimist, but current political and economic dynamics are vibrant and robust and above all they are working as designed! Things are happening and it doesn't appear to be the end of anything.

Money talks, London, and New York are seeing a flight of capital as socialism threatens. Milan is opening its doors. New stock exchanges to open in Miami and Dallas as Wall Street faces competition. It took months to ascertain how many employees were at the State Department. Forty layer approval processes were common. Multiple redundancy, bureaucracy at it best! British army Colonel Kemp sees a civil war in Britain. Unite the Kingdom protests foment ire for simply flying Old Glory. 12,000 arrested for social media posts deemed hateful. Mideast may be on the cusp of a historical peace treaty. Federal revenue is now $5 trillion/year, expenditures are $7 trillion. S&P 500 capitalization now 43% AI related. Young people abstinence trend, alcohol consumption going down dramatically. New legislation proposes banning pharmaceutical direct to consumer advertising. Ambulance chasers are taking over television and highway billboard advertising. Staged car accidents becoming common. New crime fighting technology places drones at the crime scene in 90 seconds. United Nations finds there are now more obese children than underweight worldwide. Last year 138 police officers ambushed, a record. Your being watched, University of N.M. adds 3000 more surveillance cameras after campus shooting. License plate readers on every corner, shot tracker technology and speed cameras have got your number!

Stock Market results have been extraordinary. Artificial Intelligence, data analytics or simply software is doubling in capacity every seven months, miles of data centers are under development. Many trillions have been deployed into capital development projects worldwide but especially in the U.S., the hype is deserved. There is much more to the investment universe however, most of it still overlooked and undervalued. Risk is changing, pockets of over valuation yes, but in our view geopolitics here and abroad is front and center. Democracy is vulnerable to a lack of engagement and understanding by the masses. Financial markets are also misunderstood and remain focused on a handful of names. The investor must accept the often meaningless ups and downs, the frustration, and extended periods of sideways inaction. But for now, put on your best suit, pull out your pocket watch, and act important. At this point talk of a bubble will not stop as many have not participated in a historic rally. Those who are nervous, the market timers, will eventually be right for a short time, but first place belongs to the long term investor. We remain 110% invested and it shows. Cloak Advisor Accounts have posted mean returns of 38% and 81% for the 1 and 2 year periods. Our holdings run the gambit from AI, internet, biotech, crypto, security, construction, precious metals/mining, and energy to name a few. Cloak Advisor's wealth of experience is a custom fit for today's exciting markets; it is a pleasure to see our customers rewarded.