It has been an unusually eventful month across global markets. At the start of the year, investors were focused on familiar cycle questions: would inflation continue drifting lower, would central banks begin cutting rates, and could the global economy achieve a soft landing?

Instead, the past month has been shaped by a different set of forces. Energy prices have risen sharply as geopolitical tensions in the Middle East intensified. Trade policy remains unsettled as governments experiment with tariffs and industrial policy. Fiscal spending has become a major driver of economic activity in several regions, while central banks have moved more cautiously than markets expected.

The result is an environment where macroeconomic policy once again matters almost as much as company fundamentals. Governments are influencing capital spending, industrial development, energy policy, and supply chains in ways that directly affect corporate earnings.

For the Perfect Stock Portfolio, this environment remains constructive. The companies we own tend to operate at the intersection of long-term industrial trends such as electrification, semiconductor demand, digital infrastructure development, capital markets expansion, and the restructuring of global supply chains. These themes do not require a synchronized global boom—only steady capital investment and capable management teams.

Over the past month, each major economic region has been navigating these conditions in its own way.

Europe

The European economy continues to expand modestly. Growth remains slow but stable, and the region is no longer facing the same level of fragility seen in the immediate post-pandemic period.

One of the most notable developments has been a shift toward greater fiscal involvement in the economy. Governments are increasing spending on infrastructure, defense, and industrial policy initiatives aimed at strengthening domestic production and supply chain resilience. This reflects both geopolitical realities and the recognition that public investment is increasingly necessary to support long-term growth.

Germany remains central to the European outlook. Industrial output has been weak, but policymakers are attempting to stimulate activity through targeted fiscal spending and industrial investment. While growth expectations remain modest, policy direction has become more supportive.

Energy costs remain the primary risk to the European economy. Because the region still relies heavily on imported energy, higher oil prices can quickly affect manufacturing costs and consumer spending. As a result, eurozone central banks remain cautious about cutting interest rates too quickly.

From an investment perspective, Europe continues to offer opportunities in companies tied to infrastructure, industrial technology, electrification, and defense spending, while consumer-driven sectors remain more exposed to economic volatility.

United Kingdom

The UK economy continues to face slower growth than much of continental Europe. Household consumption has been constrained by higher borrowing costs, and businesses remain cautious about capital investment.

Although real wages have begun to improve, consumer confidence remains uneven. Policymakers expect gradual improvement as inflation moderates, but fiscal constraints limit the government's ability to deliver large stimulus programs.

The Bank of England remains cautious about cutting rates too quickly given ongoing inflation risks tied to energy prices and global supply disruptions.

For investors, the UK market continues to be largely a valuation story. Many British companies trade at attractive discounts relative to global peers and offer strong dividend yields, although the macro backdrop provides limited support for near-term earnings growth.

Japan

Japan remains one of the more interesting developed markets.

For decades the country struggled with deflation, weak wage growth, and limited corporate investment. In recent years, however, structural changes—including corporate governance reforms and renewed capital spending—have begun to reshape the economic landscape.

Rising business investment and improving wage growth have allowed the Bank of Japan to slowly normalize monetary policy after years of ultra-loose conditions.

Although interest rates remain extremely low by global standards, the shift away from negative rates represents an important change for banks, insurers, and industrial companies that are once again operating in an environment where pricing power and capital discipline matter.

Energy prices remain a challenge because Japan imports most of its fuel, but the country's industrial sector remains globally competitive, particularly in automotive technology, robotics, semiconductor components, and advanced manufacturing.

Asia Outside Japan

China continues transitioning toward a slower but more sustainable growth model as policymakers attempt to rebalance the economy away from property investment and toward consumption and advanced manufacturing.

India remains one of the fastest-growing major economies, supported by strong domestic demand, infrastructure investment, and policies aimed at expanding domestic manufacturing.

The Philippines is attempting to rebuild economic momentum following a slower year of growth, while Vietnam continues benefiting from global supply chain diversification as multinational companies expand manufacturing operations in the country.

Across the region, governments are balancing economic growth with inflation control and currency stability while positioning their economies to benefit from shifting global trade patterns.

North America

North America remains the most influential capital-market region, although the economic picture has become more complex.

The U.S. economy continues to grow at a slower pace than during the early post-pandemic recovery. Inflation has moderated but remains somewhat above the Federal Reserve's long-term target, prompting policymakers to maintain a cautious stance on rate cuts.

Labor markets remain stable, with slower but still positive job growth. Trade policy and industrial initiatives continue to reshape supply chains and domestic manufacturing investment.

Canada's economy has shown signs of slowing, although its large energy sector provides support during periods of rising oil prices. Mexico continues benefiting from nearshoring trends as companies relocate manufacturing closer to North American markets.

Portfolio Developments

Against this complex macroeconomic backdrop, several company-specific developments within the Perfect Stock Portfolio deserve attention.

Millrose Properties (MRP – NYSE)

Millrose Properties delivered a strong set of results in its most recent quarterly earnings report. The company reported fourth-quarter net income of $0.74 per share and adjusted funds from operations of $0.76 per share, reaching the high end of management's expectations.

Total homesites under option contracts and related assets reached approximately $9.2 billion by the end of the year, highlighting the rapid expansion of the company's platform. Management indicated that it expects to increase invested capital outside of the Lennar master program by an additional $2 billion in 2026, an important step toward broadening the company's partnership base.

The underlying business model remains particularly attractive. Rather than taking on the operational risks associated with homebuilding, Millrose focuses on providing land capital solutions to builders. This approach generates recurring option income while maintaining a relatively asset-light operating structure.

The company also continues to deliver substantial income to shareholders. The most recent quarterly dividend of $0.75 per share represents an annualized yield of roughly 8.4% on equity, underscoring the strong income characteristics of the business.

Millrose remains a compelling example of a specialized real estate platform capable of generating stable cash flows while participating in long-term housing-demand trends.

Rohm (ROHCY – OTC)

One of the most important developments for the portfolio this month involves Rohm, a Japanese semiconductor manufacturer specializing in power electronics.

Denso has proposed acquiring Rohm in a transaction that could value the company at more than eight billion dollars. The proposed acquisition reflects the strategic importance of power semiconductors within the global automotive and industrial technology sectors.

Power semiconductors play a critical role in electric vehicles, industrial automation systems, renewable-energy infrastructure, and data-center power management. As electrification spreads across multiple industries, demand for these components continues to increase.

The proposed acquisition represents part of a broader consolidation trend within the semiconductor industry as companies seek to secure critical supply chains and expand technological capabilities.

Rohm shares rose sharply following the announcement of the potential transaction. As previously discussed, our plan is straightforward. The position has now been closed. Takeover premiums can be attractive, but disciplined portfolio management means recognizing when the market has already captured most of the upside associated with a corporate event.

JOYY (JOYY – NASDAQ)

JOYY delivered a solid financial performance during the fourth quarter and full year of 2025.

Fourth-quarter revenue reached approximately $581.9 million, representing year-over-year growth of nearly six percent and marking a return to positive revenue expansion. The company's BIGO advertising business was a particularly strong contributor, with advertising revenue rising more than sixty percent from the prior year.

For the full year, JOYY generated revenue of approximately $2.12 billion while improving both operating income and adjusted EBITDA. The company ended the year with more than $3 billion in net cash on its balance sheet, providing significant financial flexibility.

This combination of renewed growth, improving profitability, and a strong balance sheet makes JOYY an interesting platform within the digital media and advertising ecosystem. Despite these positive developments, the company continues to receive relatively limited attention from the broader investment community.

Sun Hung Kai Properties (SUHJY – OTC)

Sun Hung Kai Properties is one of the largest real-estate developers in Hong Kong and a dominant owner of office, residential, and retail property across the territory and mainland China. The company has long been considered one of the highest-quality property franchises in Asia, with a portfolio that includes prime office towers, major shopping centers, and luxury residential developments. Hong Kong real estate has been under pressure in recent years because of interest-rate increases and political uncertainty, but Sun Hung Kai's balance-sheet strength and premium asset base have allowed it to navigate the downturn better than most peers. The stock currently trades at approximately 0.61 times tangible book value and offers a 2.9% dividend yield, reflecting both the cyclical pressures facing Hong Kong property markets and the long-term value embedded in the company's land holdings and rental portfolio.

A.P. Moller-Maersk (AMKBY – OTC)

A.P. Moller-Maersk is one of the world's largest shipping and logistics companies and a central player in global trade. The company operates container shipping lines, logistics platforms, port terminals, and supply-chain management services. Shipping markets remain volatile, driven by fluctuations in global trade, energy costs, and geopolitical disruptions. However, Maersk's scale and integrated logistics strategy have helped stabilize earnings relative to smaller shipping operators. The company continues to invest heavily in digital logistics platforms and greener shipping technologies. Shares currently trade at roughly 0.94 times tangible book value and provide a 6.32% dividend yield, offering investors exposure to global trade at a valuation close to the value of the company's underlying assets.

Kyocera (KYOCY – OTC)

Kyocera is a diversified Japanese technology and manufacturing company known for its ceramics, semiconductor components, electronic devices, and industrial equipment. The company's advanced materials and precision manufacturing capabilities make it a critical supplier to industries ranging from telecommunications and automotive electronics to semiconductor production equipment. Japan's renewed emphasis on domestic technology supply chains and industrial competitiveness has increased the strategic importance of companies like Kyocera. The shares currently trade at about 1.17 times tangible book value and yield 2.11%, reflecting the company's stable earnings profile and long history of disciplined capital allocation.

Anhui Conch Cement (AHCHY – OTC)

Anhui Conch Cement is one of the largest cement producers in China and a major supplier to the country's infrastructure and construction industries. Although China's property-sector slowdown has weighed on cement demand in recent years, the company remains a low-cost producer with strong distribution networks across the country. Infrastructure investment programs and regional development initiatives continue to provide support for cement demand in selected markets. The stock trades at approximately 0.88 times tangible book value and provides a 4.56% dividend yield, offering investors exposure to China's infrastructure spending at a discounted valuation.

Bolloré (BOIVF – OTC)

Bolloré is a French holding company with interests in logistics, media, transportation, and energy infrastructure. The group has historically been known for its complex corporate structure and long-term investment strategy. Bolloré has been reshaping its portfolio in recent years through asset sales and strategic repositioning, including changes to its logistics and media businesses. The stock trades at about 0.49 times tangible book value and yields 1.87%, reflecting the market's tendency to discount conglomerates with complicated structures despite the underlying asset value within the group.

Subaru (FUJHY – OTC)

Subaru is a Japanese automobile manufacturer known for its all-wheel-drive vehicles and strong brand loyalty, particularly in North America. The company has built a niche position focused on durability, safety, and outdoor-oriented consumers. As the global automotive industry transitions toward electrification, Subaru has been expanding partnerships and investments in hybrid and electric-vehicle technology. The shares trade at roughly 0.77 times tangible book value and provide a 5.09% dividend yield, making the stock attractive from both a value and income perspective.

Porsche Automobil Holding (POAHY – OTC)

Porsche Automobil Holding is the investment vehicle that holds a controlling stake in Volkswagen Group. Through that stake, investors gain indirect exposure to brands such as Porsche, Audi, Volkswagen, Bentley, and Lamborghini. The holding-company structure often trades at a substantial discount to the underlying value of its automotive assets. Currently, the shares trade at only about 0.27 times tangible book value while yielding 5.95%, highlighting the wide valuation gap between the holding company and the market value of its automotive investments.

Swatch Group (SWGAY – OTC)

Swatch Group is one of the largest watchmakers in the world, with brands ranging from luxury names like Omega and Breguet to mass-market brands such as Swatch and Tissot. Luxury-watch demand has historically been tied to global wealth trends and tourism flows. While luxury demand can fluctuate with economic conditions, Swatch's global brand portfolio and manufacturing capabilities remain formidable. The shares trade around 0.75 times tangible book value and yield approximately 2.55%.

Dai Nippon Printing (DNPLY – OTC)

Dai Nippon Printing is a Japanese technology company that has evolved from traditional printing into advanced materials, electronic components, and packaging technologies. The company supplies components used in semiconductor manufacturing, display technology, and information-security products. Its technological capabilities make it an important participant in the semiconductor supply chain. The stock trades at roughly 1.21 times tangible book value and offers a 1.44% dividend yield.

Barratt Redrow (BTDPY – OTC)

Barratt Redrow is one of the largest homebuilders in the United Kingdom, formed through the merger of Barratt Developments and Redrow. The company focuses on residential housing construction across the UK, with particular exposure to suburban and commuter housing markets. Housing activity in Britain has been sensitive to interest-rate changes and economic uncertainty, but long-term housing shortages remain a structural support for the sector. Shares trade at about 0.66 times tangible book value and provide a 6.1% dividend yield.

Assured Guaranty (AGO – NYSE)

Assured Guaranty is a financial-services company specializing in municipal-bond insurance and credit-enhancement products. The company provides guarantees that help municipalities and infrastructure issuers access capital markets at lower borrowing costs. Despite periodic concerns about municipal credit markets, Assured Guaranty has maintained a strong balance sheet and disciplined underwriting standards. The stock trades near 0.91 times tangible book value and offers a 2.48% dividend yield.

Scorpio Tankers (STNG – NYSE)

Scorpio Tankers operates a fleet of product tankers that transport refined petroleum products around the world. Tanker markets have been volatile but profitable in recent years due to disruptions in global energy trade and shifting shipping routes. The company has benefited from strong day rates and disciplined fleet management. Shares trade at roughly 1.21 times tangible book value and provide a 3.37% dividend yield.

Yue Yuen Industrial (YUEIY – OTC)

Yue Yuen Industrial is a major footwear manufacturer headquartered in Hong Kong. The company produces athletic footwear for global brands such as Nike and Adidas through its extensive manufacturing network in Asia. As global consumer demand recovers and supply chains normalize, Yue Yuen stands to benefit from its scale and long-standing relationships with major apparel companies. The shares trade at approximately 0.86 times tangible book value and yield 4.34%.

Autohome (ATHM – NYSE)

Autohome is one of China's leading online platforms for automobile information, advertising, and digital-marketing services. The company provides car buyers with pricing data, vehicle reviews, and dealership listings while generating revenue from advertising and lead-generation services for automakers. Despite challenges in China's auto market, Autohome remains a dominant digital platform. The stock trades at about 0.92 times tangible book value and yields 6.02%.

Fresh Del Monte Produce (FDP – NYSE)

Fresh Del Monte Produce is a global producer and distributor of fresh fruits and vegetables, including bananas, pineapples, avocados, and prepared food products. The company operates an integrated supply chain spanning farming, shipping, and distribution. Demand for fresh food products tends to remain relatively stable across economic cycles. Shares currently trade around 0.87 times tangible book value and provide a 2.94% dividend yield.

Danaos (DAC – NYSE)

Danaos is a container-ship owner that charters vessels to major global shipping lines. The company has benefited from strong charter rates and disciplined fleet expansion during periods of shipping-market volatility. Danaos also holds investments in container shipping companies and continues to generate strong cash flow from long-term charter contracts. The stock trades at roughly 0.66 times tangible book value and yields 3.39%.

Ingles Markets (IMKTA – NASDAQ)

Ingles Markets is a regional supermarket chain operating across the southeastern United States. The company owns a significant portion of the real estate underlying its grocery stores, which provides additional asset value beyond the retail business itself. Grocery retail tends to produce stable cash flows even during economic downturns. Shares trade near 1.15 times tangible book value and yield 1.45%.

Megaworld (MGAWY – OTC)

Megaworld is a Philippine real-estate developer specializing in large mixed-use township projects that combine residential, commercial, and office space. The company has been a major participant in the country's urban-development boom. Despite strong long-term growth prospects for the Philippine economy, the stock trades at approximately 0.49 times tangible book value and yields 3.71%.

Hello Group (MOMO – NASDAQ)

Hello Group operates social-networking and online-entertainment platforms in China. The company generates revenue through advertising, live streaming, and subscription services across its digital platforms. While regulatory pressures and economic uncertainty have weighed on Chinese internet companies, Hello Group continues to generate significant cash flow. The stock trades around 0.49 times tangible book value and yields 9.59%, one of the highest dividend yields in the portfolio.

Genco Shipping & Trading (GNK – NYSE)

Genco Shipping operates a fleet of dry-bulk vessels that transport commodities such as coal, grain, and iron ore. The company has focused on maintaining a conservative balance sheet while returning excess cash to shareholders through dividends. Commodity shipping rates remain cyclical, but Genco's disciplined capital management has allowed it to remain profitable during market fluctuations. Shares trade near 0.89 times tangible book value and yield 10.76%.

Central Glass (CGCLF – OTC)

Central Glass is a Japanese manufacturer specializing in specialty glass products used in electronics, construction, and automotive applications. The company produces materials used in semiconductor manufacturing and advanced industrial applications. Shares trade at roughly 0.73 times tangible book value and provide a 2.49% dividend yield.

Movado Group (MOV – NYSE)

Movado Group designs and distributes watches and accessories under brands such as Movado, Coach, and Hugo Boss. The company participates in both the luxury and mid-range watch markets. Despite volatility in consumer spending, Movado maintains strong brand recognition and international distribution networks. Shares trade at about 0.89 times tangible book value and yield 3.13%.

Johnson Outdoors (JOUT – NASDAQ)

Johnson Outdoors produces outdoor-recreation equipment, including fishing gear, diving equipment, and camping products. The company owns brands such as Minn Kota and Humminbird that are widely used in recreational boating and fishing. While outdoor-equipment demand surged during the pandemic, recent years have seen a normalization of sales. The stock trades around 0.96 times tangible book value and yields 1.21%.

NACCO Industries (NC – NYSE)

NACCO Industries is a diversified industrial company with operations in mining services, energy infrastructure, and specialty equipment manufacturing. The company provides contract-mining services and operates natural-resource projects across North America. Shares trade near 1.06 times tangible book value and provide a 2.38% dividend yield.

Friedman Industries (FRD – NYSE)

Friedman Industries is a steel-processing and distribution company that supplies flat-rolled steel products to industrial and construction markets. The company operates steel-processing facilities and distribution centers throughout the United States. Shares trade at approximately 0.82 times tangible book value and yield 1.45%.

Deswell Industries (DSWL – NASDAQ)

Deswell Industries manufactures electronic components and plastic injection-molded parts for consumer electronics and industrial products. The company operates manufacturing facilities in Asia and supplies components to a wide range of international clients. Shares trade at roughly 0.66 times tangible book value and provide a 4.55% dividend yield.

As long-term investors, we are comfortable owning businesses that generate strong cash flow while remaining underappreciated by the market.

Closing Thoughts

The global economic environment remains complicated. Energy prices, geopolitical tensions, and shifting government policies are influencing financial markets in ways that can change investor sentiment quickly.

However, complexity often creates opportunity.

The companies within the Perfect Stock Portfolio operate in industries supported by long-term structural trends rather than short-term market enthusiasm. Electrification, semiconductor demand, digital infrastructure development, and capital-market expansion are themes that will shape the global economy for many years.

Our job is not to predict every short-term fluctuation in global markets. Our job is to identify strong businesses, maintain disciplined portfolio management, and take advantage of opportunities when the market provides them.

That approach has served us well over time, and it will continue to guide our strategy in the months ahead.

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