The job of the long-term investor is, ultimately, to distinguish whether a company’s prospects are being influenced by noise or signal, and then to understand whether the prospects are reflected in the price. This is particularly true of the situation regarding Facebook and the furore surrounding improper sharing of users’ data by the company. While Facebook undoubtedly needs to learn from this experience, its core offering remains true: as a powerful, nearly irreplaceable platform for users to participate and connect with the world around them. Facebook has been a boon for investors since its listing. The owner of the Facebook, Instagram and WhatsApp messenger platforms listed at $38 in May 2012 and rose to $176 per share by December 2017, achieving a 31.4% annualised return over the period versus 16% for the S&P 500. The rather "un-tech" like returns have been driven by old-fashioned revenue generation, strong operating margins and earnings growth. Facebook generates revenue by se...

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