Mr. Market

AAA

DEFINITION of 'Mr. Market '

An imaginary investor devised by Benjamin Graham and introduced in his 1949 book "The Intelligent Investor". In the book, Mr. Market is a hypothetical investor who is driven by panic, euphoria and apathy (on any given day), and approaches his investing as a reaction to his mood, rather than through fundamental (or technical) analysis.

INVESTOPEDIA EXPLAINS 'Mr. Market '

Investor and author Benjamin Graham invented Mr. Market as a clever means of illustrating the need for investors to make rational decisions in regard to their investment activities instead of allowing emotions to play a deciding role. Mr. Market teaches that although prices fluctuate, it is important to look at the big picture (fundamentals) rather than reacting to temporary emotional responses. Graham is also well-known for his most successful student, multibillion-dollar value investor Warren Buffett.

RELATED TERMS
  1. Value Investing

    The strategy of selecting stocks that trade for less than their ...
  2. Herd Instinct

    A mentality characterized by a lack of individual decision-making ...
  3. Fundamental Analysis

    A method of evaluating a security that entails attempting to ...
  4. Lemming

    The act of an investor following the crowd into an investment, ...
  5. Panic Selling

    Wide-scale selling of an investment, causing a sharp decline ...
  6. Benjamin Graham

    A scholar and financial analyst who is widely recognized as the ...
Related Articles
  1. The Intelligent Investor: Benjamin Graham
    Investing Basics

    The Intelligent Investor: Benjamin Graham

  2. The 3 Most Timeless Investment Principles
    Investing Basics

    The 3 Most Timeless Investment Principles

  3. Financial Wisdom From Three Wise Men
    Options & Futures

    Financial Wisdom From Three Wise Men

  4. The Financial Markets: When Fear And ...
    Active Trading

    The Financial Markets: When Fear And ...

comments powered by Disqus
Hot Definitions
  1. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  2. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  3. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  4. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  5. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  6. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
Trading Center