Long-term investing
Mr. Market
Definition
Graham’s imaginary partner who offers every day to buy your share or sell you his, at a price set by his mood: high when euphoric, low when gloomy. You may ignore him; his prices are there to serve you, not to guide you.
Example
Say you estimate a business is worth $50 a share. On a gloomy day Mr. Market offers to buy your stake at $35, 30% below your estimate; you can simply say no, or buy more from him at that price. Months later, euphoric, he bids $80, 60% above it, and you are free to sell him some, since his quote reflects his mood, not the value of the business.
Hypothetical numbers, for illustration only.
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