Warren Buffett believes in buying great businesses, even if that means paying a small premium. On countless occasions, he has purchased shares in a company only to buy even more shares later at an even higher price. "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price," he once quipped.

But sometimes, it's possible to buy a wonderful company at a wonderful price. That possibility is currently a reality with Shopify (NYSE: SHOP) stock, which is down 59% over the past three years. There are two main reasons this company should join your portfolio today.

Consider iconic companies like , Meta Platforms, and Amazon. These businesses all benefit from network effects. Network effects describe how a particular product or service grows in value as more people use it. As more people use Visa credit cards, for example, more merchants are incentivized to accept them, which only spurs even more adoption from consumers. The same is true for social media networks like Facebook and Instagram -- both of which Meta Platforms owns. It's also true for Amazon, which attracts more merchants by adding more customers, and attracts more customers by adding more merchants.

Continue reading

Source Fool.com