Usually, when it comes to stocks with high growth rates, I don’t get to show my full appreciation for the business because the P/E ratio is something obscene (thus obliterating the margin of safety principle and deterring investment) so it sounds like I’m against the company even if I am impressed by its story, profit margins, and future. Facebook’s P/E ratio is 73, and you know what I think about that, but today I’d like to talk about the company’s business developments.
The long-term viability of Facebook is something that I’ve put in my “too hard” pile because I can’t figure out its moat. On one hand, I study the data that shows slight declines in usage among teens and people in their early 20s. About three years ago, Facebook piqued with the young crowd in which 98% of the 18-24 demographic had an active Facebook account. Now, that figure … Read the rest of this article!