Your business partner is manic and you should love him for it
Benjamin Graham invented an imaginary partner in 1949 to explain why the market's mood swings are a gift, not a threat.
Imagine you co-own a private company with a partner named Mr. Market. Every single day, without fail, he shows up at your door and names a price — sometimes to buy your share, sometimes to sell you his. The catch: Mr. Market is wildly emotional. Some mornings he's euphoric and offers you triple what the business is worth. Other mornings he's despondent and begs you to take it off his hands for a third.
That's the allegory Benjamin Graham built in The Intelligent Investor to describe the stock market itself. Warren Buffett has called the chapter the best thing ever written about investing, because it reframes the whole relationship: you are never obligated to trade with Mr. Market on his terms. His quote is information about his mood, not about the business's actual value.
Most investors do the opposite — they let his panic set their price and his euphoria set their courage. Graham's trick was smaller than a formula. It was giving the market's moodiness a name, so you'd stop mistaking it for truth.