I heard this many years ago. Asking a fund manager colleague, she mentioned it was mostly a fear of liquidity, not a question of HFTs, but should bad news stri

I heard this many years ago. Asking a fund manager colleague, she mentioned it was mostly a fear of liquidity, not a question of HFTs, but should bad news strike, the markets she tended to invest in didn't hold up well (or were not perceived to hold up well, perception causing reality) and price falls were irrationally large, due to this lack of liquidity. Now, a fund manager that tends to hold onto a stock when its falling by definition sees the falls as irrational, but this was confirmed by her colleague that walked into the room. He added "what's really important is when retail investors start buying, then that's really the time to sell [as after the stock gets popular with the public, who's left to pump it up]."