IP & Art

In the stock martket, the most mysterious thing will be volatility of the stock price. Every minutes the stock price is changed. Nevertheless, such volatile stock price will reflect the value of the company's stock? That will be a first question for the first investor who enters into the stock market. 

The stock price will be dicided through the mechanism of demand - supply in the stock trading market. Therefore, every time the proposed price of the buyer and seller will be different. Only when both meets at a same amount of price, then the price will be decided. Therefore, some discrepancy will be inevitable in terms of the intrinsic value of the stock traded. 

The volatility of stock price is not easy concept for the stock investor to figure out. As for me, the concept of "Mr. Market" theory of Benjamin Graham gave me a key to solve this volatility concept and mechanism. 

He explained to us that this kind of volatility was a phenonema Mr. market might bring because he is a cyclothyme. Depending on his mood, he propose to buy or sell at a unreasonable price, and this cause the volatility of stock price. 

Further, he gave us a valuable tip for us not to be influenced by Mr. Market, but make use of his character in order to "buy low, sell high".

It must be a wonderful and brilliant interpretation of the charateristics of the stock market! It will bring us to jump into a new stock market. It will be another challenge to a NEW WORLD.