Hang Seng rebalancing and the danger of 'sure things'

Back in 2020, with all the buzz around Alibaba $9988.HK and Tencent $0700.HK inclusion in the Hang Seng index rebalance, I got a bit too confident. The market knew it was coming, everyone was talking about the passive inflows that had to materialize. I scaled into a few of these names pre-announcement, convinced it was a low-risk, high-probability bet on the index trackers. What I completely underestimated was how much of that was already priced in, and how quickly the 'event' would be sold. The initial pop was negligible, and then the selling started as early birds took profits. I held on for a bit too long, expecting a second wave of buying that never came, essentially giving back all the initial (small) gains and then some. It was a clear lesson in efficient markets and the danger of assuming your read on an obvious catalyst is somehow superior to everyone else's. The 'sure thing' often isn't.