Here was definitely $ASML (-1,64%) the driver. But the ETF also performed very well and I am therefore very satisfied with the performance for this month.

I'm using my latest milestone to introduce myself and my portfolio :)

I started investing in 2020 on my 18th birthday and initially tried out a lot of things, which led to me falling into the wrong trap more than once. I then significantly reduced my stock picking and initially focused on building a strong core with ETFs (mainly S&P500). I still have a few portfolio corpses from that time, which I am saving in order to fill my loss pot in the event of higher price gains in the future. I hardly have any opportunity costs due to the very low value.

Fast forward: I am 23 today and am delighted to have reached this milestone. Today, thanks to $IREN (-3,8%) the necessary boost.

I have invested over 50% of my portfolio in ETFs. Almost all of my savings plans are in these funds. Brand new in the savings plan and therefore still a very small position: the MSCI EM. I also have a few smaller positions in individual shares:

$ASML (-1,64%) I had the savings plan running at around €500 for a long time, but have now suspended the savings plan for the time being due to the high price gains. I am still holding the position.

$GOOG (-1,61%) When I bought in at €94 in 2022, I couldn't have dreamed of this price gain in such a short time. Nice surprise, so no savings plan here either for the time being, but I'm continuing to hold on because the figures have developed well in line with Google.

$IREN (-3,8%) I opened a small position here about a month ago. The share has performed very well since then. It's a somewhat riskier position, but I'm very confident in the current market environment, which is why it's only a small position.

$ADBE (-0,96%) New in the portfolio and the only single share I currently invest in on a monthly basis. As long as Adobe is around €300, I would like to continue to build up the position here. In my opinion, the (negative) impact of AI on the business model is massively overestimated.

The remaining individual shares $SQ (-1,6%) , $JD (-2,72%) , $CRSR (-1,35%) and $SE (-1,65%) are the aforementioned "portfolio corpses" from earlier times. As I said, I will sell them at breakeven, otherwise I will save these positions for the loss pot.

I am now invested with a total of € 20.3 thousand, having added € 540 to my $FWRG (-1,03%) added to my account. It's not even a full year since I started, but I'm holding on to what's working. So far I'm at +17.6 % MWR YTD and +10.2 % TWR YTD. The structure is simple: a broad ETF core that I pay into every month and a small satellite segment with a few individual stocks like $ASML (-1,64%) , $NVDA (-1,58%) and $GOOGL (-1,61%) as well as a very small speculative position, which includes $IREN (-3,8%) which jumped after the Microsoft news. I stopped P2P lending this year and parked the liquidity in regulated ETFs.

My DCA has been more or less consistent. In some months I invested more, in others less. Over the next 2 to 3 months, I don't expect to add much more than €500 per month because I'm saving for a house down payment. Houses here often go for at least €20k over the asking price, sometimes even €50k to €60k.

I'm not only the first in my family to have an MSc, but also a PhD, and I'm learning about investing as I go. My subject is not finance, but it's hard to overlook how important financial education is today. We no longer live in the 80s or 90s where a single income could comfortably cover a house, vacation and a good pension. Basic investment habits seem like a necessary foundation today.

What I'm learning is primarily behavioral. Consistently paying into the core via DCA helps. Position sizes are more important than being right on every trade. Tracking MWR and TWR in parallel separates timing effects from the actual performance. In the short term, my goal remains to maximize growth with a stable all-world core. I only add to individual stocks when the prices are right.

If you have a similar strategy, I would be happy to receive suggestions on the structure. Would you expand the global ETF core further or add targeted tilts such as quality, equal weight or regional focuses to reduce concentration risks without diluting growth?

Reading time: 8 minutes

Growth companies are at the heart of modern capital markets - but they are difficult to value. Traditional ratios such as P/E or price-to-book value reach their limits when companies make losses in order to conquer markets. This is precisely where the Rule of 40 comes in: a simple but surprisingly meaningful indicator that puts growth and profitability in relation to each other - and thus shows whether a business model is economically viable.

The rule itself is simple:

Sales growth (%) + operating margin (%) ≥ 40.

If a company reaches or exceeds this threshold, it is considered efficient and balanced - it is growing strongly without burning excessive capital. If the value is significantly lower, there is a risk of an imbalance between expansion and profitability.

The ratio originally comes from the US software industry, particularly from SaaS companies, which often do not yet report profits but are growing strongly. Investors there were looking for a way to combine growth and efficiency on a single scale. The Rule of 40 provides exactly that - a simple efficiency indicator.

An example illustrates the principle:

• Company A grows by 50% but has an operating margin of -20% → score 30.
• Company B grows by 25 %, achieves +20 % margin → score 45.

Although company A is growing faster, company B is clearly more efficient - and usually more stable in the long term. The decisive factor is the ratio, not the level of growth alone.

The following applies in practice:

• > 50 %: exceptionally strong, growth and profitability in balance.
• 40-50%: solid, sustainable and controlled.
• 30-40 %: acceptable, but often cyclical or low-margin.
• 20-30%: fragile, efficiency problems visible.
• < 20 %: critical, model mostly unbalanced.

For typical SaaS companies, a value above 40% is a sign of a mature, efficient business model.

Examples from practice:

• $SNOW (-2,18%) (Snowflake): Sales growth ~34%, operating margin ~12% → Score 46.
• $CRM (-1,06%) (Salesforce): Growth ~11%, margin ~30% → Score 41.
• $PLTR (-6,77%) (Palantir): Growth ~45%, operating margin ~12% → Score 57.
• $APPN (-1,39%) (Appian): Growth ~15%, margin -20% → Score -5.
• $V (-0,45%) (Visa): Growth ~10 %, operating margin ~67 % → Score 77 - exceptionally efficient, hardly cyclical.

However, the metric does not work everywhere. It is tailored to scalable, digital models in which high fixed costs are quickly covered by rising sales. It is less meaningful in capital-intensive or cyclical industries.

Examples where it only works to a limited extent:

• Industry & hardware: Fluctuating margins due to economic cycles, e.g. at $VRT (-2,45%) (Vertiv) or $ASML (-1,64%)
• 
  Utilities & Energy: Focus is on stability, not growth - a value above 40% would be rather suspicious here.
• Biotech & early-stage tech: Low sales and high development costs make the key figure hardly usable.
• Consumer & platform models: High marketing expenditure can distort the score in the short term, which is why a smoothed multi-year value is more meaningful.

The Rule of 40 therefore does not measure valuation, but efficiency. It helps to compare growth companies and assess whether expansion is sensible or expensive.

Some analysts now use extended variants:

• Free cash flow margin instead of operating margin → stronger focus on liquidity.
• Rule of 50 as a premium filter for particularly efficient growth companies.
• Trend analysis over several years → rising scores indicate operational maturity.

In my Hidden Quality Radar (HQR) model, the key figure is included in the Growth & Profitability dimension:

• Scores above 40 receive high scores.
• Scores between 30 and 40 are considered neutral.
• Values below 30 are critically scrutinized.

The key figure also serves as a stability filter in the 10B model (tenbagger approach). A company with high sales growth but a Rule of 40 score below 20 is rarely a sustainable tenbagger - usually just a speculative bet.

The bottom line is that the Rule of 40 is not a dogma, but a helpful compass. It forces discipline - both on the part of management, who strive for profitable growth, and on the part of investors, who want to separate substance from hope. Especially in times of rising interest rates and capital discipline, it is becoming more important again.

Questions for the community:

Which of your portfolio stocks currently fulfill the Rule of 40 - and how stable do they remain over several quarters?

Do you also find the ratio useful outside the SaaS sector - for example in industrial or infrastructure stocks?

Do you actively use the Rule of 40 in your analysis, or is it more of a theoretical guideline for you?

Bought a chunk $O (-0,12%) Purchased and currently owns 100 shares of it. Watch the new video and subscribe and follow my Road To 100K

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$ASML (-1,64%)

https://youtu.be/7IJFiPBHMbk?si=GcyetnqgcIxfhmZr

Hello everyone,

As I wanted to make use of my tax-free allowance this year, I took action again today and did some regrouping.

Share sale $ASML (-1,64%) with 50% profit

New additions to my portfolio are $1211, (-1,23%)
$ROP (-0,59%) and $ORCL (-1,89%)

And yes, I know $TSLA (-2,1%) is clearly overweight. In the long term, I want to gradually shift this position, but I only recently received it from my parents as I had it in my parents' portfolio at the time as I was not yet 18 when it was bought.

I would also be happy to receive recommendations on where I can switch them.

I also currently have two savings plans $IWDA (-1,04%) and $IEMA (-1,34%) .

The other ETF positions are still from old savings plans that are no longer running.

What would be your opinion?

My sell order on $ASML (-1,64%) has been hit. Taking profits does NOT make you poorer.

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