A new allegory, on the lines of Mr Market
Like famous Mr Market, investors need a few more allegories.
Mr Promoter, Mr Banker (hard to get a good deal buying from them in IPOs or otherwise).
Most topical allegory for today is Mr Gormint.
Mr Gormint can be fickle like Mr Market, except that his influence is not on stock price but on intrinsic business value.
He's way less fussed about business value & its compounding than Mr Shareholder.
It's hard to tell what Mr Gormint's true objectives are.
They can be very different from those of Mr Shareholder.
Once in a while, Mr Gormint can materially dent business value in a seemingly irrational way, not caring for Mr Shareholder.
Ben Graham advised to ignore Mr Market unless his offer is compelling.
With Mr Gormint, it's best to avoid, unless his role is negligible.
If avoidance isn't possible, best to keep exposure small at portfolio level and expectations modest.
What Mr Market does to stock prices, Mr Gormint can do to business value.
Naturally, former damage is transient while latter can be lasting.
(Here’s what I wrote a month back on this, while on the topic of “Who am I backing here”)