Mr. Market is Benjamin Graham’s most famous lesson from The Intelligent Investor. He teaches that an investor should imagine the market like a partner. An irrational partner who will offer you a price for the business every day. Depending on that price you can either sell him the business or buy more equity. Most often the offer won’t be worth thinking about, other times Mr. Market will get spooked or wildly excited and offer you a price far above or below the actual value of the business. On these days you might consider selling or buying. Most days its probably not even worth checking Mr. Market’s quotes. Instead, Graham says, the investor should just focus on the business as if you were an operator. Track what management is doing and the businesses prospects.
Connections
Link Explanation: The strategy explained in the linked note is very similar to Graham’s Mr. Market analogy. The linked note describes how it is better to just monitor the market and wait for periods where businesses are available to buy at a discount. Basically this is the same thing as just following the business like an operator and waiting for Mr. Market to offer you a price on a day he is feeling particularly pessimistic.