Mr. Market Isn't So Foolish, After All
Ben Graham's analogy is beguiling but inaccurate.
An Emotional Fellow
You and Mr. Market jointly own a private business. Each day Mr. Market announces the amount that he believes the business is worth. You may pay him half that figure to become the full owner, cash out of your stake, or do nothing.
This arrangement strongly benefits you, because while Mr. Market determines the amount, you alone possess agency. You, not Mr. Market, decide if a transaction will occur, and if so, in which direction and at what price. Better yet, Mr. Market is an idiot--the proverbial sucker at the table. When he's giddy, he "can only see the favorable factors affecting the business," and thus "names a very high buy-sell price." Other times, "he is depressed and can see nothing but trouble ahead … on those occasions, he will name a very low price."