I have written about Economic Moat and how it is one of the analysis factors whether a company should be within your radar for investment. Economic moat refers to the sustainable competitive advantage that protects a company from its competitors.
If you are a value investor and you are investing in a company for the long haul, one of the first steps is to determine whether a company has a strong economic moat. A company with a strong economic moat will stay in business with huge profits for many lasting years.
Does Facebook have a strong economic moat?
Many of us will argue that it has. As a digital marketer, I am totally convinced. Facebook after all is one of two Giants of Online Advertisements.
Recently Facebook’s share price was heavily beaten down with billions of dollars of market capitalization wiped out, and its share price reached a low of about $150.
If you did not yet own Facebook, what would you have done?
For me knowing that Facebook has such a strong moat and that it still has tremendous growth potential moving forward, I was happy to seize on the opportunity presented and made some good profits.
I strongly recommend that you have a good grasp of the topic of economic moat as a value investor.