On: How to Prepare for a Recession

[lbotos]

Because people who are over leveraged need to sell their stock to live, so they sell at “any price”.

For a stock price to fall someone has to sell, and someone has to buy, so someone is taking the long position in said company.

Additionally, the stock price is the belief on future profits so if the horizon looks worse then the past, then people may want to shift investments.