QG Fund Update: Sitting Tight Through a Roller Coaster Week


This was another one of those weeks that tested the spirit of many traders. With a bad day Tuesday followed by a good day Wednesday followed by a really bad day Thursday followed by a big bounce back on Friday, it would be easy to understand why any trader might want to throw in the towel.

The beauty of having a rules-based approach to trading is that I wasn’t forced to make tough decisions on any of those days this past week. At about noon Tuesday, I wanted to sell everything and stay on the sidelines.

I also wanted to sell on Wedneday when I thought we were just getting a temporary bounce back. I also wanted to sell on Thursday when things looked really bad.

Unlike me, my QG Fund strategy never flinched. AFSI was actually the only stock that even came close to signaling an exit this week. The strategy held strong with the type of guts I don’t have, and it was rewarded on Friday.

Having a set of rules that you can trust when it starts looking like the shit is going to hit the fan is incredibly calming. If the QG strategy held up in the fall of 2008, it knows how to get through the tough times. All I have to do as a trader is trust my research. I can leave me gut feelings, and the responsibility that goes with them, at the door.

Overall Performance

As of this weekend, the QG Fund has a total value of $108,788.84. That means it is up 8.79% since the beginning of the year, compared to 7.98% for the S&P 500. For the first time since its inception, the QG Fund is outperforming the general market.

Since I implemented changes like reducing the number of positions and adding the HV filter on March 30, the QG Fund is up an astounding 14.82%, compared to only 5.65% for the S&P 500. This is still a small sample size, but it still feels good.

Here is what each of the individual holdings look like this weekend:


The biggest jump this week was SWKS notching a 14% gain on Friday morning. I am guessing that this was probably an earnings beat, but in true trend follower fashion, I honestly didn’t even bother to check.

Entries & Exits

As I said, there were no exits this week. AFSI is still the worst holding and is flirting with both exit rules, but has not triggered either of them just yet.

With no exits, we still have no room for new positions. If we did have room, this is what a scan for 20-week highs in this weekend’s IBD 50 would return:


We can eliminate the bottom three right off the bat because they fail to meet our minimum ROC. Of the remaining three, BITA would fail to meet our HV requirement.

That leaves THRM and SWKS as the only possible new entries this week, and both are already owned by the QG Fund.

In the coming week, we will take the same approach we do every week. If things go well for the market, I’ll follow the rules. If things go bad for the market, I’ll follow the rules.

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