Cognitive Scaffold

Preparing your thinking workspace

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MENTAL MODEL · M0562

Mr. Market

Mr. Market
BusinessHigh supportFinance
Included
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Version 1.0.0 · Updated 2026-07-30

CORE DEFINITION

The stock market is personified as a manic-depressive patient. Every day he quotes a price to buy or sell your stocks; when he is in a good mood, he quotes high prices, and when he is in a bad mood, he quotes low prices.

SCAFFOLDING EFFECT

psychology

Reduce cognitive load

Emotional isolation: Clarify your relationship with the market—he is there to serve you, not to guide you. Use his mood swings (buy low, sell high) rather than being infected by his emotions.

anchor

Anchor fast decisions

Benjamin Graham used the 'Mr. Market' allegory to explain stock price fluctuations: imagine the market as an emotionally unstable business partner who quotes a buy/sell price every day, sometimes euphoric, sometimes depressed. His quotes reflect emotions rather than the intrinsic value of the company.

MINIMUM ACTION

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Source support: Explicit

  • link
    en.wikipedia.orghttps://en.wikipedia.org/wiki/Mr._MarketZH · Explicit
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