Mr. Market

Mr. Market is a metaphor coined by investor Benjamin Graham to describe the stock market's daily mood swings. Imagine a business partner named Mr. Market who shows up every day offering to buy your shares or sell you his at a different price, sometimes wildly optimistic, sometimes wildly pessimistic, based purely on emotion rather than the business's actual value.

The lesson is that an investor is never obligated to trade with Mr. Market just because he shows up with a price. A rational investor treats his quoted price as an opportunity to buy when he is unreasonably pessimistic or sell when he is unreasonably optimistic, rather than assuming his mood reflects the truth about what a business is worth.