Mr. Market

Dr. Craig Callahan, ICON Advisers – Founder & President

March 30, 2020

It seems timely to recall a metaphor described by Benjamin Graham*, the ultimate value investor. In reference to the stock market, he wrote of “Mr. Market.” He said Mr. Market will call you every day and try to entice you into trading. The only problem is, Mr. Market exhibits various psychological traits such as schizophrenia, manic-depressant and bi-polar behaviors. When he gets happy and optimistic, he goes way beyond what is appropriate. When he gets pessimistic and worried, he again, goes way beyond what is appropriate. He can quickly flip between alternate behaviors. Benjamin Graham said to hang up on Mr. Market because he will entice you to do the wrong thing at the wrong time. Only call Mr. Market when you want to trade. For example, when Mr. Market is overly optimistic, call him up and sell him your stocks. When he is fearful, call him up and exploit him by buying stocks from him at cheap prices.

During most of March 2020, Mr. Market has been calling, in a very fearful state, attempting to entice investors into selling. Mr. Market has no privileged or special information. It would seem that everybody knows of the economic problems caused by containment measures. Acting on that common information would not seem to be advantageous.

At ICON, we thank Benjamin Graham for his metaphor and other great contributions to the investment arena. We believe it is not prudent to give in to Mr. Market and sell. To the contrary, we think current market behavior is typical of the formation of a market bottom.

*Benjamin Graham was an investor, economist and professor. He is widely known as the “father of value investing”, and wrote two of the founding books in neoclassic investing: Securities Analysis with David Dodd (1934) and The Intelligent Investor (1949). He taught investments at Columbia University where Warren Buffett was a student of his. Dr. Callahan was introduced to Graham’s concepts and Central Value Formula in graduate school. Though modified over the years, they are the foundation of the ICON investment methodology.

Opinions and forecasts regarding industries, companies and/or themes and portfolio composition and holdings are all subject to change at any time, based on market and other conditions, and should not be construed as a recommendation of any specific security, industry or sector.

Investing in securities involves risks. There is no assurance that the investment process will consistently lead to successful results.

The unmanaged Standard & Poor’s Composite 1500 (S&P 1500) Index is a broad-based capitalization-weighted index comprising 1,500 stocks of Large-cap, Mid-cap, and Small-cap U.S. companies.

Please visit ICON online at InvestWithICON.com or call 1-800-828-4881 for the most recent copy of ICON’s Form ADV, Part 2.

Mr. Market

Dr. Craig Callahan, ICON Advisers – Founder & President

March 30, 2020

It seems timely to recall a metaphor described by Benjamin Graham*, the ultimate value investor. In reference to the stock market, he wrote of “Mr. Market.” He said Mr. Market will call you every day and try to entice you into trading. The only problem is, Mr. Market exhibits various psychological traits such as schizophrenia, manic-depressant and bi-polar behaviors. When he gets happy and optimistic, he goes way beyond what is appropriate. When he gets pessimistic and worried, he again, goes way beyond what is appropriate. He can quickly flip between alternate behaviors. Benjamin Graham said to hang up on Mr. Market because he will entice you to do the wrong thing at the wrong time. Only call Mr. Market when you want to trade. For example, when Mr. Market is overly optimistic, call him up and sell him your stocks. When he is fearful, call him up and exploit him by buying stocks from him at cheap prices.

During most of March 2020, Mr. Market has been calling, in a very fearful state, attempting to entice investors into selling. Mr. Market has no privileged or special information. It would seem that everybody knows of the economic problems caused by containment measures. Acting on that common information would not seem to be advantageous.

At ICON, we thank Benjamin Graham for his metaphor and other great contributions to the investment arena. We believe it is not prudent to give in to Mr. Market and sell. To the contrary, we think current market behavior is typical of the formation of a market bottom.

*Benjamin Graham was an investor, economist and professor. He is widely known as the “father of value investing”, and wrote two of the founding books in neoclassic investing: Securities Analysis with David Dodd (1934) and The Intelligent Investor (1949). He taught investments at Columbia University where Warren Buffett was a student of his. Dr. Callahan was introduced to Graham’s concepts and Central Value Formula in graduate school. Though modified over the years, they are the foundation of the ICON investment methodology.

Opinions and forecasts regarding industries, companies and/or themes and portfolio composition and holdings are all subject to change at any time, based on market and other conditions, and should not be construed as a recommendation of any specific security, industry or sector.

Investing in securities involves risks. There is no assurance that the investment process will consistently lead to successful results.

The unmanaged Standard & Poor’s Composite 1500 (S&P 1500) Index is a broad-based capitalization-weighted index comprising 1,500 stocks of Large-cap, Mid-cap, and Small-cap U.S. companies.

Please visit ICON online at InvestWithICON.com or call 1-800-828-4881 for the most recent copy of ICON’s Form ADV, Part 2.