The network effect is one of the most resilient barriers to entry and one of the hardest competitive advantages to create.
Here are my favourite companies benefiting from networks:
• Visa $Visa(V)$
• Mastercard $MasterCard(MA)$
• FICO $Fair Isaac(FICO)$
Fortunately I’m not a value investor! FICO is probably in the top 0.1%, if not 0.01%, of companies in terms of business quality.
It’s incredible how many humans use either Facebook, Instagram or WhatsApp.
I’m starting to see that $Copart(CPRT)$ more and more in the UK. Compared to a few years ago when I only ever saw it on Fintwit!
What would you add?
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