As the founding father of value investing, Ben Graham has made countless contributions to the field. Few have been more influential than his allegory of Mr. Market. Prone to bouts of euphoria and pessimism, Mr. Market is sometimes willing to pay exorbitant prices for companies and sometimes willing to sell them at a fraction of their value. Graham distinguished between speculators that tried to take advantage of short-term changes in prices and investors who ignored market movements except for the periods when Mr. Market was at his most pessimistic. During these periods an astute investor who focused on the value of the underlying business rather than market sentiment would get rewarded in the long term.

The value of your interest in investing should be determined by rationally appraising the business's prospects, and you can happily sell when Mr. Market quotes you a ridiculously high price and buy when he quotes you an absurdly low price. The best part of your association with Mr. Market is that he does not care how many times you take advantage of him. No matter how many times you saddle him with losses or rob him of gains, he will arrive the next day ready to do business with you again.

The lesson behind Graham's Mr. Market parable is obvious. Every day the stock market offers investors quotes on thousands of businesses, and you are free either to ignore or take advantage of those prices. You must always remember that it is not Mr. Market's guidance you are interested in, but rather his wallet.