January 2026

Managed Opportunities 2025 Year-End Review

“Truth is like the sun. You can shut it out for a time, but it ain’t goin’ away.” ~Elvis Presley

These are not normal times. The prices of gold and silver are at all-time highs, while the U.S. is trying to buy one country’s territory and seize another country’s oil.

World order is not the only thing shifting. For the past twenty years, big technology companies have dominated the U.S economy and the stock market. Growth came from software, online commerce and social media – businesses that required relatively little capital and thus generated enormous profits for owners. Now, however, these same companies face a different reality.

As the largest and most successful companies all pivot to artificial intelligence and high-performance computing; infrastructure, supply chains and critical natural resources have become chokepoints. This shift is still in its preliminary stages. Just as the bursting of the dot-com bubble created a golden era for value investors, we see strong parallels occurring today. This creates tremendous opportunities in a small subset of companies.

While seemingly endless capital continues to flow into big tech for data centers and computing power, capital flows away from the companies that provide the critical resources to fuel that growth. For the large tech companies to be successful in their pursuit of artificial intelligence, there is no alternative to using vast amounts of power. Our country currently does not have sufficient supply of electricity to power this increase in demand.

That is the direction the river is flowing, and we are positioned to profit meaningfully from it by owning oil, gas, water, land and other natural resources, and other companies that will benefit from these trends.

So, what have you done for me lately?

The fourth quarter was challenging for our investments, and we delivered sub-par results in the 2025 calendar year. However, when we zoom out, the picture is far more encouraging and acceptable. With our outsized returns in 2024, our trailing 24-month results of nearly 30% annualized look fantastic. Our 5-year results, notably post pandemic, when politicians abandoned financial discipline and the printing presses went haywire, are also impressive. Our portfolio is built for this environment, and we believe it will continue to deliver more than satisfactory results.

If we had to reduce equity investing to one essential skill, it would be this - the ability to wait correctly. Not patience in a passive sense but disciplined active waiting. We encourage you to read our enclosed recent article, “What is a New Money Buy”.

As this letter goes to press, the year is off to a strong start. Further, we are also eagerly awaiting anticipated news from several key investments.

A “Busted” Opportunity

Utilities are typically viewed as safe and stable investment, attractive for consistent dividends rather than extraordinary growth potential.

Yet episodically, a utility can run into trouble – due to poor management, regulatory changes or natural disasters. In extreme circumstances, the solvency of the company can be called into question. These “busted utilities” situations are classic value opportunities.

Hawaiian Electric (HE) is a monopoly utility, supplying power to the Hawaiian Islands. Historically the company was viewed as a high-quality utility, with a growing market and limited competition. The market valued the company accordingly.

In 2023, disaster struck with the Maui wildfires. Without admitting liability, Hawaiian Electric agreed to pay $1.9 billion to a settlement fund. $1.9 billion that the company did not have. The company was forced to eliminate its dividend, which was previously uninterrupted since 1903. The company also borrowed heavily, and its stock declined 74% in a month.

That is when we got excited!

Simply put, the earnings of HE are temporarily impaired. The operating income is not. Said differently, the lights are not going out in Hawaii and people are still paying their electric bills. One year into our ownership, the company has made meaningful progress in restoring its balance sheet. All an investor needs is a little patience for Hawaiian Electric to simply return to a safe, stable, boring utility.

Hawaiian Electric represents a compelling risk/reward investment and could return multiples of our initial investment over the next few years.

Account Reviews?

As we begin 2026, we would like to speak with you more. Perhaps we share more color on our core investments, recent portfolio activity, or short and long-term performance. We would like to hear what is on your mind and how we can better work with you.

Please let us know a time convenient by clicking on this calendar link:

https://calendly.com/josh-mriver/30min

Alternatively, you can always call Josh Stewart at 617-531-1734 or email at josh@mriver.com.

We and our families are the largest investor group at Mad River. We are genuinely excited about the potential of our current investments and the broader opportunity set for our strategy.

Thank you for partnering with us.

Best regards,

Rick Silver & Josh Stewart

Important Disclosure on Model Performance: For the purpose of presenting historical performance information, we reference and present the performance of our Model. While limitations exist with models, we believe our Model offers a reasonable assessment of the typical performance of our historical investment selections for clients. Our Model is based on a taxable portfolio investing since the inception of the investment strategy in March 1999. The Model is presented net of all fees (adjusted to the highest annual fee charged to clients), brokerage expenses, and includes the reinvestment of dividends and interest. The Model generally reflects the performance of portfolios under management since the strategy’s inception in 1999. Client performance will deviate from the Model due to, among other reasons, the starting point of a client relationship; client guidelines, circumstances, and directives; the size of a portfolio and its relative costs; additions and withdrawals of funds; the timing and historical position sizing and concentration of investments; and the account type and its ability to participate in certain investments. During this period there were no strategies employed to obtain the results portrayed other than those implemented for clients pursuant to the Model and disclosed in our Form ADV. Please carefully review our Form ADV for further information. We encourage and strongly recommend that you discuss with us the application, correlation, and significance of the Model’s performance to our client’s historical returns.

Important Disclosure on Benchmark Comparison: The S&P Composite is regarded as a gauge of the US equity market. This index includes a representative sample of 500 leading companies in leading industries of the US economy. Although the S&P 500 focuses on the large-cap segment of the market, we believe it serves as a reasonable proxy for the US market. Nonetheless, the use of the S&P Composite as a comparison may not be appropriate for a variety of reasons including, but not limited to, Model and client account(s) being more concentrated; volatile; holding cash, fixed income investments, and/or option contracts; being short securities; or the average capitalization of companies comprising the Index not correlating with the capitalization of the companies comprising the Model.

Important General Investing Disclosure: Inherent in any investment is the potential for loss of capital, past performance is not indicative of future results, and the value of investments and the income derived from investments may increase or decrease. It is not our intention to state, indicate or imply that future investment results will be profitable or equal past results. The information presented is meant to form the basis of a discussion with us and is subject to further clarification and explanation during discussions with us. This information may not be duplicated, redistributed, or communicated to others without our consent. This is not an offer or solicitation to any person in any jurisdiction in which such an action is not authorized or to any person to whom it would be unlawful to make such an offer or solicitation. We do not provide tax or legal advice to our clients, and you are strongly urged to consult a tax or legal advisor regarding any potential investment strategy.

This communication may include opinions and forward-looking statements. All statements other than statements of historical fact are opinions and/or forward-looking statements (including words such as “believe,” “estimate,” “anticipate,” “may,” “will,” “should,” and “expect”). Although we believe that the beliefs and expectations discussed are reasonable, we can give no assurance that such beliefs and expectations will prove to be correct. All expressions of opinion are subject to change. You are cautioned not to place undue reliance on these forward-looking statements. Any dated information is published as of its date only. Dated and forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any dated or forward-looking statements. Investment process, strategies, philosophies, portfolio composition and allocations, security selection criteria and other parameters are current as of the date indicated and are subject to change without prior notice. 1/2026