As most English students will tell you, the term 'pathetic fallacy' describes the personification of nature, typically by despondent poets, or the treatment of inanimate objects as if they bore human characteristics. In matters of finance and investment, perhaps the best example of 'pathetic fallacy' is Ben Graham's coinage, Mr. Market. Warren Buffett goes on to explain the analogy in the Berkshire Hathaway 1987 Annual Report:

"Ben Graham, my friend and teacher, long ago described the mental attitude toward market fluctuations that I believe to be most conducive to investment success. He said that you should imagine market quotations as coming from a remarkably accommodating fellow named Mr. Market who is your partner in a private business. Without fail, Mr. Market appears daily and names a price at which he will either buy your interest or sell you his.

"Even though the business that the two of you own may have economic characteristics that are stable, Mr. Market's quotations will be anything but. For, sad to say, the poor fellow has incurable emotional problems. At times he feels euphoric and can see only favourable factors affecting the business. When in that mood, he names a very high buy-sell price because he fears that you will snap up his interest and rob him of imminent gains. At other times he is depressed and can see nothing but trouble ahead for both the business and the world. On these occasions he will name a very low price, since he is terrified that you will unload your interest on him.

"Mr. Market has another endearing characteristic: He doesn't mind being ignored. If his quotation is uninteresting to you today, he will be back with a new one tomorrow. Transactions are strictly at your option. Under these conditions, the more manic-depressive his behaviour, the better for you.

David Fuller's view This reminds me of the best investment advice that I have ever heard, and first heard on Wall Street in the late 1960s: "Buy low, sell high."