Mr.Market – The Man Friday who works for free
Sounds cocky, right? Let me try and make my case.
An investor’s life isn’t easy. Winning to one actually means losing to a whole lot of others. The truth is that every smart investor gains from the stupidity of others. In my view, smartness can be demonstrated only if you can find the requisite stupidity. That counter point is what makes smartness stand its ground. That is the story of every investing success. So, for once, let us give stupidity it’s fair due.
What is so special about Mr.Market?
His very construct. Imagine how life would be if everything was efficient about the stock market. Imagine if there was no irrationality. Investing will be a nightmare with no upside. Irrationality is what breeds every investing success. Only that the investor feeds on it like a parasite. The irrationality is what Mr.Market generously doles out to the smart investor.
The smart investor’s alter ego is Mr.Market. He fills the need for someone who will do your bidding without questioning you. Even if it meant acting irrationally just so you can benefit from it. One needs such a foot soldier on whom you could rely upon to deliver every time. One who will wilfully bear the cross so that smart investors enjoy the gains.
The best part is you don’t need to even ask him. I have seen Mr.Market work for me like no one else. He has done 22 years unblemished service with no remuneration. His loyalty to my cause has been total. My cause was to create wealth and I always needed an irrational fellow who will sell my what I like at prices I like; buy my stocks are high valuations giving me easy exits on quantities which I struggled to build for months together.
What if there was no Mr.Market ?
I am nobody without Mr.Market. He is the central character in my investing story. Over two decades , my respect for Mr.Market has risen as I gradually understood the role-play. My empathy towards the troubles of Mr.Market have grown with me. I really hope that one day there will be no Mr.Market. That the pain of losses will never fall on anyone. But, my head tells me that will never be. Mr.Market is actually forever.