Mr. Market
#big-ideas #speculation #valuation
Benjamin Graham, the father of value investing, created a brilliant metaphor for market behavior. ==He imagined a peculiar partner named Mr. Market who shows up daily to either buy your share of the business or sell you his.== Sometimes his offers are reasonable, but often they're driven by extreme fear or enthusiasm. "If you are a prudent investor," Graham advises, "you will not let Mr. Market's daily communication determine your view of value." Instead, wise investors form their own judgments based on company fundamentals, only dealing with Mr. Market when his prices become absurdly high or low.