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.

 

/wrk

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