Market Mea Culpa Follow-Up
This is a short post, following up on my August 8 post. On Tuesday morning, I started hearing the Cisco layoff rumors while I was at the Opco Tech Conference in Boston. I spoke to a few people at the conference about it and the response was I was crazy.
Everyone I spoke to said that everyone was so positive on Cisco because the channel checks and peer reports were fantastic. The day after Cisco, which was Walmart day, was really interesting. I was long VOL as a hedge and down on all my hedge positions. They came roaring back and I made a little money in the portfolio at the end of the day. Nothing like a couple of bad reports and a macro event (Egypt) to stir the pot. Add in taper worries, taper talk and boom we have some vol. What I really think happened yesterday was many money managers took risk off the table ahead of the holiday week. I also remembered the lesson that the biggest surprises happen when least expected. Everyone was so positive on Cisco, no one could see a miss coming and everyone seemed to be in position for a move higher. Lesson reinforced again, manage risk.