Ryshab's Year-End December 2025 Portfolio Update

[ryshab]

My Performance (Benchmark: S&P 500)

• 2021: -36% (+27%)

• 2022: -76% (-19%)

• 2023: +80% (+24%)

• 2024: +104% (+23%)

• 2025: +85% (+18%)

CAGR

• 1 Year CAGR: +85% (+18%)

• 3 Year CAGR: +89% (+23%)

• 5 Year CAGR: +1% (+14%)

Current portfolio holdings:

• ALAB 18%

• CRDO 15%

• DAVE 14%

• TARS 13%

• RDDT 12%

• CRMD 8%

• MDGL 8%

• IREN 5%

• CRWV 5%

• AVGO 4%

Portfolio is 102% long and has 10 positions

Changes this month

• Sold:

  • ETON, HIT, FENC - I still believe in each of these names. But I feel the game of growth investing is saying “no” to a lot of names you like so that you can focus only on the best names that deserves your capital. Because of this reason, I removed these names from my portfolio.

  • DUOL, SEZL - These were option assignments, so I recovered my capital and liquidated these positions. These are good candidates for selling options, so I expect from time to time these might show up for a month or two in my portfolio.

  • NVDA - Not enough implied volatility to keep me interested. It’s too big and moves relatively slower than other higher growth options in this space. And since I am still in the phase of wealth accumulation and not wealth protection, i decided to let this one go.

• Bought

  • IREN, CRWV, AVGO - Details below.

My holdings - historical view:

My Quant Model Scores: (the higher score the better, I own all green bars)

Set 1: Quality 40+, Growth 30%+, IV 40+
Set 2: One of the above criteria fails but still some are great opportunities. Just high risk, high reward

This is the next iteration of my methodology model score. I have been thinking for a while that my methodology score is limited as it really rewards the high fcf, low dilution and high margin players. And many of the speculative names doesn’t even make the cut because the fcf numbers mostly suck for them. The second reason I switched my model is I realized I am not rewarding business enough to have degrees of separation in projected forward growth. If there is one thing the market values above anything else is revenue growth. And this quant model is my first attempt to quantify it.

So what my quant score does is basically take the quality score and forward revenue growth together and tries to quantify degrees of separation based on how superior one business is over another in one scale. My current model takes base quality score at 40 and base forward growth at 40% as well. Then it runs this quantifier scale to spit out degrees of separation between two businesses.

Formula: (Quality Score + Forward Growth) / (40+40)

For example: Business 1 (Quality Score of 40, Forward Growth of 40) , Quant Score = 1

For example: Business 2 (Quality Score of 80, Forward Growth of 40) , Quant Score = 1.5

For example: Business 3 (Quality Score of 10, Forward Growth of 30) , Quant Score = .5

For example: Business 4 (Quality Score of 10, Forward Growth of 150) , Quant Score = 2

How to read the quant scores:
Below 1 = Avoid
Above 1 = Maybe
Above 1.5 = Good Opportunity
Above 2 = Great Opportunity

I put two filters on top of this to make sure I don’t bet on low growth stocks or low implied volatility stocks. So for each I have a criteria set to min. growth higher than 30% and min. implied volatility higher than 40. And for IV, I use the average of 30, 90, 180 and 365 days for a given stock.

If I lax, I usually will lax on quality score but not on growth or implied volatility. That’s mainly because I believe in 1-3 quarters, these names should hit the 40 quality score mark. Of course, execution is key.

If all of this is too confusing, just know the higher the quant score the better the opportunity.

Why I own what I own:
Note: Sharing my opinion, not advice

• ALAB - 18%

  • I added to Astera Labs as it came in almost 50% and fundamentals haven’t changed one bit. 50% forward growth with 30% fcf is unique territory. Extremely high quality business that got expensive and came in a bit.

• CRDO -15%

  • Credo had one of the best reports I have seen this past quarter but stock price came in 30%+. That’s the funny thing with investing - no one knows if the value is built in or the stock will explode higher to create more value for shareholders. I am comfortable holding this now as a Tier 1 position. No idea if this will move before next earnings. But between their expanding product suite and high demand, I expect Credo to continue to put up some good numbers in 2026.

• DAVE - 14%

  • Everything I said in my last report is still true for DAVE today. But forward growth projection is low at 31%. So a beat and raise will still be required for DAVE to break out of this 6 month consolidation pattern. Dave has done that successfully for the past three quarters, so I am hopeful and staying in. Might bump this down to Tier 2 as I worry when forward growth slows below 40%

• TARS - 13%

  • Tarsus’s product is absolutely killing it. Helps to be the only game in town.

  • Forward growth most likely will be 60%+ and about to print a lot of FCF. Remember, I was telling you about businesses that just turned positive fcf but ttm fcf is a drag. This is the perfect example. If they keep executing, I think multiple expansion is on the way.

  • Can’t complain on a stock that just doubled in 4 months. Yes, you have to live through a 8 month hibernation but as long as the numbers hold, I am fine with that.

• RDDT - 12%

  • Reddit is a high quality business both in terms of growth and fcf. The stock has consolidated almost 5 months and now starting to show life again. This thing moves fast, so this move that started from $175 can easily double with a couple of good reports. Let’s see how things unfold.

• CRMD - 8%

  • Cormedix has been in a range for 14 months now. I will give it couple of more quarters if the numbers look good. But if this fails to breakout in the next 6 months, I might find better businesses to redirect my capital. But overall execution has been good, so I am holding on.

• MDGL - 8%

  • Madrigal is another business that just turned positive FCF. With a 95% gross margin, this thing should be able to get upto 50% FCF margin. The shareholders have been handily rewarded and so far the stock looks very strong. I have been wanting to increase my position on this but this market has not given me any entry so far.

• IREN - 5%

  • The merits of this business and it’s product suite has been discussed pretty thoroughly here. Hence, I am skipping the product side of reasoning.

  • Opportunity wise, IREN came in a lot in this brutal pullback and got cut more than half. At these levels, it is starting to look quite attractive and if in the next two quarters it can make some dent in it’s fcf numbers, the market will be all over this again. With a 130%+ potential growth in the next 12 months, this has a lot going for it.

• CRWV - 5%

  • 60% drawdown in this name. Single digit price to sales for a 100%+ revenue grower in the next 12 months. I think it’s cheap. Hard to say something is cheap when they just printed a -187% ttm fcf but the trend is rapid and exponential. Current quarter FCF is down to -52% and growth is expected to hover in the 120%+ range for 4 to 6 quarters. This is part of my trying to move to the earlier part of the S curve positioning.

  • The product quality is there, growth is in place, fcf trend is pretty good so far and 57% dilution should be cut in half or more in the next 12 months. This is why I think if they execute, it will look cheap soon. So I am in, let’s see how it goes.

• AVGO - 4%

  • AVGO is kind of following the NVDA path. Their forward growth and FCF numbers are similar. AVGO is smaller, more volatile and overall seems like has more upside. The recent pullback provided me with a great entry point, so I have a Tier 3 starter position on this stock. Very high quality and very well known. Should be an easy 30% gainer if it stays on track. But I will admit, this is not a strong conviction holding for me. Too big but for now I am rolling with it.

Some random thoughts on what I learned in 2025-

• I am a numbers guy when it comes to investing. I am constantly trying to push to the left of the S curve. Trying to catch names as early as possible but within my quant framework. This is what I have realized I am good at.

• I am also good at cutting positions as soon as I see weakness. There have been a couple to missteps (HIT, BSEM) but mostly I have been sharp in taking action when something didn’t sit right with me. (HIMS, SEZL)

• Sometimes, due to fomo, I will get into a position and then analyze the stock or read more about it. This has led me to get in, out, in, out on a stock many times. Best examples are APP and NVDA.

• I have also realized since I am mostly investing within a quant framework, I will rarely be early on a stock. So I am comfortable owning a name that blew up and have pulled back or a small name where I have missed the first 100% of the move. And that’s ok - still a work in progress but ok for now.

• Very few names will make it in my portfolio 12 months. But the ones that do, I am sure will have stellar performance. So I need to get more used to the fact, that I will run through 20, 30, 40 names in a year.

• I need to carry more cash as my portfolio grows. I really don’t need 130% exposure when VIX is at 35. Need to work on that, a lot!

• I put a lot of stock in analyst estimates and how well the business is beating it. But what I have learnt this year is it’s ok to miss analyst estimates as long as the estimates are sky high. Think 60% or 80%+ forward growth.

• The most consistent winners I have found come from one group of stocks. Stocks that are high growth and is at the cusp of turning fcf+. Usually these have a drag with fcf ttm negative numbers but the current quarter turned fcf+. These businesses if keeps piling on positive fcf for a few quarters usually gets very handily rewarded both due to high growth and multiple expansion.

Wrapping Up

Third year of beating S&P 500 handily. As they say, one’s a fluke, two’s coincidence but three’s a pattern. Hoping mine has made it to the pattern level now. Sure, the wind is behind our backs and everyone and their mother is printing money but even if the pitch is down the middle, you still need to hit it out of the park. The first two years were very painful for me in growth land but I made it worse with options and leverage. If markets go in a extended drawdown after three years of bull market, I know I will lose more than the indexes but it’s not going to be because I made it worse or didn’t own the very best names.

This community has given me a lot and I continue to learn more everyday from you all. So THANK YOU! It’s an absolute privilege to post here. Thank you for reading. Cheers and happy new year to all!

My previous portfolio reviews:

2025: Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov

2024: May | Jun | Jul | Aug | Sep | Oct | Nov | Dec

[anthonyms]

Awesome results and great contribution ryshab!

Quick question - why didn’t you take a position in NBIS or Micron given they rank higher than some of your holdings? (I hold both as well as some ranked below them but that isn’t why I’m asking - more about the method and thinking).

Cheers
Ant

[ryshab]

Thanks Ant!

The reason I avoided Nebius is related to their FCF margin. Currently, it sits way above 100%. I usually will jump in if the trend for FCF is getting closer to positive territory and it’s showing meaningful progress but for Nebius I don’t see it yet. IREN - actually looks better in terms of working towards profitability. At these high negative FCF levels, a small misstep can really topple the thesis. Hence, the pause.

For Micron, I definitely want to get in. But since the time I re-looked and Micron and it came back on my radar, the market hasn’t given me an entry. I usually like to have a margin of safety by waiting for a pullback or let the general markets have a correction and then get into a name. It’s more psychological than analytical positioning. For example, Credo or Alab after great earnings plummeted and if I was buying at those high levels, though theoretically it should work out, the drawdown related mental toll would be an unnecessary burden. Hence, until I get a proper entry, which may not come given how strong Micron has been lately, I will most likely not chase.

[drew1618t]

Ryshab,

Well done. I always find your methodology model score very interesting. It seems it has evolved several times in the last few months. If you don’t mind can you walk through the changes to your model? Where do you get Forward Growth? Are you estimating it yourself or using analysts or companies projections.

Drew

[ryshab]

Hi Drew, thanks! Yes, my model did go through quite a few iterations and I believe it will probably evolve further.

Currently the quant score I use, has two fundamental pillars. Quality Score and Forward Growth Projection.

Quality Score:
Basic formula: (NTM Growth Rate% + FCF Margin% - Dilution%) x (Gross Margin%)
Let me break down how I use each of these parameters.

NTM Growth Rate: I calculate this by taking the average of current year and upcoming year growth rates. I use Koyfin for analyst estimates. Then for current year, I use a rule which bumps the current year estimate by half of what analyst upgrade%. Again I use current year and upcoming year average analyst upgrade percent for this bump.

Let’s take Credo for example:

Credo TTM sales is 796 mil.
Credo NTM sales is 1.467 bil.

Analyst prediction of ntm growth rate is 84%
Next year’s prediction by analysts is 40%
Average analyst upgrade for current year and next year is 107%
So I take 107%/2 = 54% as a bump to current NTM sales estimates.
So the NTM number I use is 1.467 bil * 54% = 2.25 bil.
Because of this my ntm growth shift from an average of (84+40)/2 = 62% to (183+40)/2 = 111%

This was a complete view under the hood for how I don’t use TTM growth, or NTM growth or 2 year analyst growth average. I use the above formula because this allows for the most accurate movement as things shift every quarter or when any analyst upgrades or downgrades the stocks and changes it’s key assumption matrix.

FCF Margin: Here I have two rules. If LTM FCF margin is higher than current quarter FCF, I will use LTM numbers. This is not ideal because this essentially says the business is failing to improve it’s KPIs quarter over quarter. But for businesses whose current FQ margin is higher than ltm margin, I use a scale that tips the fcf two-third in the favor of current quarter of improved fcf margin.

For example, if ltm fcf is -50% but current quarter is +10%, I will tilt the scale two thirds in this businesses favor since it’s one the way up and use -10% as the FCF for calculation.

Dilution: This is quite simple. I pretty much take the basic number of shared YoY% change and use the number. So you will see certain stocks like ONDS has a very high quant score but it’s dilution currently sits at 300%. I try to not touch anything that is over 50% dilution, generally speaking.

Gross Margin: Usually this rule is kept to put in check businesses that have low gross margin because they may have ultimately a cap on how much fcf they can generate if their margins are 20% or 30%. I have one override here. If a business is 60% margin only. Usually a score of 80 using growth+fcf-dilution will get cut to 48 using the 60% margin multiplier. But if the fcf margin for this business is 50%, I will change the 60% gross margin to 100%. The whole point of this gross margin quantifier is to throttle low margin businesses since they can never generate huge fcf but when I see it’s pulling of great fcf numbers I release this stranglehold. This is done by a using a easing scale from 0% to 50% in fcf margin and based on where the business lies, I will add a bump to the gross margin quantifer.

For example. I business with a score of 80 with growth+fcf-dilution. Say has a 50% gross margin. The quality score would be 80 .5 = 40. But say this business is pulling in 25% fcf marign already, then I ease on the margin restraint and the gross margin multiplier is 75%. So now the new score based on 25% fcf margin is 80 * .75 = 60

So that wraps up the quality score part of the quant score. Again, I use a base of 40 as a score. So if the quality score is 100, it adds 100/40=2.5 to the quant score formula.

Quant score Formula:
(Quality Score + Growth)/ (40+40)

Say for Credo, here are the numbers:
(103+111)/80 = 2.68

For HIMS
(27+23)/80 = .63

How to read the quant score:
Below 1: avoid
Above 1: maybe
Above 1.5: good investment idea
Above 2: great investment idea.

And then there are the guard rails:
Quality Score: above 40
NTM Growth: above 40
Dilution: ideally better than -50%, even better if better than -20%
FCF margin: better than -100%, even better if at the cusp of positive territory, elite if at +40% or above

Here’s IREN:
(38+162)/80 = 2.5
Yellow flags currently - quality score below 40, dilution at 53% and fcf at -81%. This is a good example of trying to jump the gun. If IREN delivers the next two quarters, we should see quality improve, fcf improve and overall this move out of the yellow flags.

Finally, I have one more threshold of IV. I need implied volatility to be over 40. Good if over 60 and fabulous over 80. And for this I take the average of 30, 90, 180, and 365 days. The reason is I usually buy stocks when they have pulled back and I expect good picks to have a stretched rubber band effect. To maximize that, you need high IV. Otherwise, it might not more enough to be worth the risk being taken with these unprofitable, future growth companies. You can use the tariff time in april or last august or 2023 oct as pivot points. These were stretched rubber band scenarios, during this times I need to be in 60+ IV companies which have been beaten down and falls within my quant framework.

Sorry for the long post. But I feel like there is too much nuances to explain in writing. Maybe, I will make a video about this. Will be much easier to explain and show with examples.

Also, this is a point in time view. As you pointed out, I expect my methodology and quant score model to change again in the future.