Mr. Market

Benjamin Graham's allegory of a business partner who repeatedly offers to buy or sell at changing prices. It illustrates the option to evaluate a quote against an independent assessment and decline a transaction.

Mr. Market is Graham's fictional partner who repeatedly offers a price for a share of a business. The illustration distinguishes an available quote from the owner's assessment of the underlying business. Its practical feature is optionality: receiving an offer does not normally require accepting it.

The difficult work remains evaluating the business and one's own constraints. A price change may contain useful information about prospects, financing, or risk. Record the evidence behind a valuation range and the circumstances that would change it. The allegory supports deliberation while leaving open the possibility that the market knows something the individual has missed.

When to use it

When a changing quote creates pressure to act, or when examining the distinction between an offer and a supported valuation.

How it can help

Encourages separating price, evidence about the business, personal constraints, and the decision to trade. Independent analysis can be wrong and should respond to new information.