QG Fund Update: Don’t Make Impulse Trading Decisions


The QG Fund nearly gave me a heart attack on Friday morning.

As I was standing in line at the bank, I pulled out my phone and opened the thinkorswim app like I do on most mornings while standing in line at the bank. On this particular morning, my mouth dropped and my heart stopped when I saw a huge red number indicating that TRN was down almost 50% on the day.

The shock of this number freaked me out and during that shock I misinterpreted the overall account value and was under the impression that the total account had dropped to a value of only $75,000. This caused my O’Neil training to kickin and all I could think was “get out of it as fast as you possibly can!”

Luckily, for some reason I had a second of calm and was able to remind myself that my strategy never exits a position until the morning after an exit signal is produced. I don’t freak out and overreact, despite what my emotions were telling me to do. Who knows, maybe it was a flash crash type thing that would work itself out by the end of the day.

Of course, there was no need to panic at all, because the reason TRN was down so much was that the stock had split 2:1. Everything was fine. No cause for concern.

Lesson of the week: Don’t allow yourself to make any trading decisions while freaking out in line at the bank. Allow yourself time to calm down and properly assess the situation.

With that, let’s look at how the QG Fund performed this week:

Overall Performance

This was another kick ass week for the DTAYS Quantitative Growth Fund. After I got done freaking out about the drop in TRN, I noticed that SHPG was up huge on Friday. Big win for the QG Fund.

For some reason, the number of shared that the QG Fund is holding of TRN did not double to match the price cut, but after correcting for this error, the fund has a value of $104,285.05.

That means that the fund is up 4.29% on the year. With the S&P 500 now up 7.14% on the year, we are still trailing the general market, but the gap is closing.

Here is what the individual holdings of the QG Fund look like this weekend (again, note that there should be twice as many shares of TRN):


Entries & Exits

This was another easy week for the guy running the QG Fund. There were not exits. Actually, nothing even came close to signalling an exit. Because the fund is full, there are no entries to worry about either.

If we did need to identify new entries, here is what scanning the IBD 50 for new 20-week highs produced this weekend:


As you might have expected after a big week, there are quite a few names on this list. Chopping off anything below an ROC of 30 or a Historical Volatility above .40 leaves us with FANG, LAD, SWKS, SHPG, EOG, CLR, APC, and AKRX.

I’m taking it as a good sign that many of the stocks held by the QG Fund are still making this list. Those new highs keep getting higher, which is what monster stocks are known for.

With that said, anything might happen in the week to come, so we must be prepared to switch gears and dump everything if that’s what the strategy tells us to do.