Introducing, Mr. Market
Mr. Market is an imaginary investor originally created by renowned investor and teacher, Benjamin Graham. If everyone happened to be a 100% rational and logical investing machine there would be no way for anyone to make any profits in the market. We’re human though, we make emotional decisions and our analysis isn’t always right. Mr. Market represents the actions of the masses and embodies the groupthink elements of the market.
Mr. Market is quite the emotional fellow, one day he’s more excited than a Labrador in a ball pit and the next he’s dying his hair black and walking down the boulevard of broken dreams. He doesn’t make rational decisions, he’s driven by extreme emotions that cause him to ring the alarm, party like its 1999, and some days, he’s simply apathetic. One could say, Mr. Market is a manic-depressive with randomly swinging moods.
When trying to understand the market we aim to distinguish between the fundamental analysis of the economy (DATA! DATA! DATA!) and what is the result of a Mr. Market mood swing. Mr. Market’s mood swings create buying and selling opportunities for investors, so we’ll be checking in on him regularly to get an idea of what may be happening in the market on a given week.
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- Max & Thomas
Disclaimer
This writing is for informational purposes only and the author/s undertake/s no obligation to update this article even if the opinions expressed change. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. It also does not offer to provide advisory or other services in any jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. The author/s expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.