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There are a range of reasons. Firstly, it is easy to forget how panicked people are after the event .
Remember how scared people were when Lehman collapsed or 9/11 happened? Few people do now.
But every time there is a major event, be it in the stock market or politically, there are always many "very serious looking people" who suggest that "this time is different".
The media makes more money out of fear than hope, so they peddle simple and fear-mongering narratives. The attached quote says it all.
That means there are often two kinds of people who panic during crashes:
1. Those who know that markets have always recovered previously, yet they think this time will be different, and forget that this is what is always said after every crash.
2. Those who don't know that markets have always recovered previously.
Beyond that the following reasons can contribute to it
1.Peer-pressure, or influence from a community. If everybody else online, and in your friendship network is selling, then shouldn't you as well?
2. A certain percentage of people aren't panic selling but need the money due to losing their job
3. Some people don't panic sell on the day, but wait until markets rise so they break even, and then they sell! This is due to wanting to avoid a direct loss. Yet long-term, this is also a destructive behaviour.
4. Lack of patience. If markets don't recover for years, such as in 2000 or 2008, even some people who didn't panic sell originally do so.