Benjamin Graham's 'Mr Market' explains investor irrationality

In The Intelligent Investor (1949), Benjamin Graham — Warren Buffett's mentor — asked readers to imagine owning a share in a business with a partner called Mr Market. Every day Mr Market offers to buy your share or sell his, and his prices are driven entirely by his mood: euphoric one day, despairing the next. Graham's lesson was that you should exploit Mr Market's irrationality rather than be infected by it — buy when he's panicking, ignore him when he's manic. Buffett called the book 'by far the best book about investing ever written'.

Source: Graham, The Intelligent Investor (1949)