One of the best explanations I've heard for $/ is due to TheDamian1:
$/ tells Perl when to stop reading.
So, when $/ has its default value of newline, Perl stops reading when it sees the newline character. When it's not defined, Perl doesn't stop reading until the end of the stream.
1I'm pretty sure of the source, but not 100%. If you have a correction, please let me know.
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