The great Benjamin Graham liked to refer to "Mr. Market" to explain the movements of stock prices. Imagine, Graham suggested, that Mr. Market is your business partner, and every day he shows up and offers to buy your interest in the business or sell you his. Graham, a Columbia University professor, wrote his seminal The Intelligent Investor in 1949 and literally taught Warren Buffett everything he knows about value investing.

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Buffett's reading of Mr. Market is that he has "incurable emotional problems." Some days he feels euphoric and names a high price for his share. Other days, he's depressed and wants to unload his share for a pittance.

Given his neuroses, there's danger in listening to Mr. Market's advice. But Mr. Market is treated as a sacred oracle by many members of the financial media, who act like shamans trying to divine meaning from his every utterance, even when he's just clearing his throat.

Every day, the media assign market movements to random events -- and sometimes even attribute different market shifts to the same event. I remember one day when the consumer confidence number was announced and the market immediately went up. That was because it was encouraged by the report, according to a media shaman. But, uh-oh, at midday the market was down because the report wasn't as strong as expected. And by day's end, the market was mixed because it didn't know what to make of the report. The real reason for the market's ups and downs could have been that Mr. Market was having a bipolar day.

Mood Swings

Listening to Mr. Market may be foolish, but knowing whether he's euphoric or blue could be mighty useful. You could buy low and sell high, or at least not be swayed by the media's reading of Mr. Market's tea leaves.