Who is Mr. Market?
He's a character created by investor Benjamin Graham in his 1949 book 'The Intelligent Investor'. Graham imagines that he and Mr Market are co-owners of a business. Mr Market, who is ultra mood-swingy, regularly offers to sell his share of the business or buy the reader's share.
Where have you heard about Mr. Market?
His hyper-sensitive character has been cited many times to explain the wild fluctuations of stock markets. Warren Buffett described 'The Intelligent Investor' as 'by far the best book on investing ever written', and it's become very well known.
What you need to know about Mr. Market.
Mr Market's estimate of the value of his business frequently fluctuates from wildly optimistic to very pessimistic, and the book makes clear that the only reason for the change is Mr Market's emotions. A rational person would sell when the price is high and buy when it's low - he wouldn't sell a stock just because the price has gone down.
Graham thinks it's important to concentrate on whether a company's stock valuation is reasonable after assessing its value through fundamental analysis. This contrasts with Mr Market, who is impatient and impetuous.