Mr. Market
Warren Buffett · 1987
"The stock market should be viewed as a manic-depressive business partner whose daily price quotes exist entirely to serve you, not to inform or guide your estimate of a business's intrinsic value."
Imagine you co-own a private business with a partner named Mr. Market, who shows up at your door every single day offering to buy your half or sell you his. Most days his mood swings from euphoric — naming absurdly high prices — to depressed, offering to sell for pennies. The business itself hasn't changed; only his mood has. Warren Buffett's point, building on his mentor Benjamin Graham: you're never obligated to trade with him. His daily quote is an offer you can take or ignore, not a verdict on what your business is actually worth.
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Great, Good, and Gruesome Businesses
"A truly exceptional business must possess an enduring competitive advantage — an economic moat — that protects its high returns on invested capital from the relentless assault of free-market capitalism."