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Mr. Market

Mr. Market was a fictional character created by Benjamin Graham to explain how to think about the stock market. This character was introduced in The Intelligent Investor.

Expanded Definition

Mr. Market has a couple of odd behaviors. First, he will come visit you every single day and not remember his previous visits. Second, he will be in one of two moods: ecstatic or depressed.

When he is ecstatic, he will offer to buy shares of companies you hold or sell you shares of companies you don't own for a high price.

When he is depressed, he acts just the opposite, quoting low prices for the stocks you own or are interested in.

It is best, for investors wishing to take a long position, to buy when he is depressed and sell when he is ecstatic. (And just the opposite for those opening a short position.)

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