Of course, this was an event that was uncertain and could not have been properly handicapped in spite of the all of the polls. There may not be a behavior bias with being wrong on a highly uncertain event. The complexity of the issue made any judgment on how citizens would vote ambiguous. Unfortunately, if investors were truly facing an uncertain event, holding cash or hedging would have been the trade before the event. So why was the market positioned differently?
Many managers are going to require some deep introspection on how they positioned themselves for this trade.