Warren Buffett frequently references “Mr. Market,” an important concept introduced by Benjamin Graham in The Intelligent Investor, to illustrate the unpredictable nature of the stock market. Mr. Market symbolizes the market’s emotional swings, sometimes offering fair prices and other times presenting irrational valuations driven by fear or enthusiasm.
Buffett stresses that investors should view the market as a servant, not a guide. At the 2012 Berkshire Hathaway Annual Meeting, he described Mr. Market as a “psychotic drunk” prone to frequent mistakes. “Your job is to remember that he’s there to serve you and not to advise you,” Buffett explained.
The lesson is clear: investors must form their own assessment of a company’s value based on its financial health and performance. As Graham advised, only engage with Mr. Market when his offers align with your valuation—selling at inflated prices and buying during downturns. The rest of the time, wise investors ignore the noise and trust their own analysis.
Hear Buffett’s full explanation
See the complete Lessons From Warren Buffett series
© 2025 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.