There is a well-known investment philosophy, that is, invest in a company with a moat. The general idea is that a company must have sufficient competitive advantages to resist the encroachment of other competitors on its own profitability. Investors can only invest in this way. Companies are likely to bring excess returns. However, moats often have traps, and the most common trap is market share. A higher market share is usually regarded by investors as the moat of the company, but practice has proved that this is not the case. Unreliable. Market share only illustrates the company's past performance, not the future. If there is not enough ability to resist foreign invasion, the company will have to maintain market share through price wars, and the result must be a sharp decline in profitability.
The statement 'The market share reflects the size of the company's competitive advantage' is correct according to the text.