The following appeared in a letter from a firm providing investment advice to a client. "Homes in the northeastern United States, where winters are typically cold, have traditionally used oil as their major fuel for heating. Last year that region experienced 90 days with below-average temperatures, and climate forecasters at Waymarsh University predict that this weather pattern will continue for several more years. Furthermore, many new homes have been built in this region during the past year. Because these developments will certainly result in an increased demand for heating oil, we recommend investment in Consolidated Industries, one of whose major business operations is the retail sale of home heating oil."
Write a response in which you discuss what questions would need to be answered in order to decide whether the recommendation and the argument on which it is based are reasonable. Be sure to explain how the answers to these questions would help to evaluate the recommendation.
In the investment advice sent to the firm's client, the author urges the reader to invest in Consolidated Industries. The author uses a glut of reasoning in supporting his or her claim. On the surface, the evidence seems reasonable. Further thought proves that more detailed explanations need to be examined.
To begin with, the author readily assumes that what has been used in the past - in this instance, oil for heating fuel - will be used in the future. In a recent Wall Street Journal article, the columnist analyzed the energy industry concluding that the oil industry has lost market share and electricity is increasing it's share exponentially. Perhaps the northeast will continue it's dependence on fuel for heating; we simply do not know. The evidence does not provide ample information to prove that fuel will continue to be the main energy source for heat in future. Therefore, the investor can not use these details to guide their business decision.
Furthermore, the advisory firm cites last year's below-average temperature statistics to support their claim. While it is certainly a compelling data point, the reader of the letter has no way of knowing what that average represents. For instance, if it is a national temperature average it would include extreme environments: inclusive of the tropics and the poles. These areas are outliers and would skew a more representative number. Without further information detailing which average is used to juxtapose the average temperature in the northeast to it's peers, the author does not provide a cogent argument in influencing the investment decision.
Additionally, the firm goes onto reference climate forecasts by Waymarsh University. Waymarsh University released temperature predictions for the next few years, asserting that similar weather patterns will continue. This information reaffirms the authors point, but weather predictions are not accurate. In a recent interview, Neil de Grasse Tyson (famous astrologer) was quoted saying that "technology has advanced, but weather analytics has remained stagnant." His point being that the technology is nearly impossible to predict. Weather is sporadic and presumptions from a University do not provide sufficient evidence to influence the investment dilemma.
In summary, the advisory firm may have made correct assumptions in it's letter to their client, but the investor can not assume they are correct. Alternatively, these presumptions were not backed by sound evidence. The investor will not be able to make an informed investment without facts.
| Post date | Users | Rates | Link to Content |
|---|---|---|---|
| 2017-03-22 | lebronjames | 58 | view |
| 2013-08-06 | adnanhanif | 80 | view |
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Grammar and spelling errors:
Line 1, column 38, Rule ID: POSSESIVE_APOSTROPHE[2]
Message: Possible typo: apostrophe is missing. Did you mean 'firms'' or 'firm's'?
Suggestion: firms'; firm's
In the investment advice sent to the firms client, the author urges the reader to ...
^^^^^
Line 1, column 233, Rule ID: SENT_START_CONJUNCTIVE_LINKING_ADVERB_COMMA[1]
Message: Did you forget a comma after a conjunctive/linking adverb?
Suggestion: Further,
...surface, the evidence seems reasonable. Further thought proves that more detailed expla...
^^^^^^^
Line 3, column 558, Rule ID: IN_PAST[1]
Message: Did you mean: 'in the future'?
Suggestion: in the future
...e to be the main energy source for heat in future. Therefore, the investor can not use th...
^^^^^^^^^
Transition Words or Phrases used:
but, furthermore, if, may, so, therefore, while, for instance, in summary, to begin with
Attributes: Values AverageValues Percentages(Values/AverageValues)% => Comments
Performance on Part of Speech:
To be verbs : 17.0 19.6327345309 87% => OK
Auxiliary verbs: 11.0 12.9520958084 85% => OK
Conjunction : 8.0 11.1786427146 72% => OK
Relative clauses : 9.0 13.6137724551 66% => More relative clauses wanted.
Pronoun: 28.0 28.8173652695 97% => OK
Preposition: 42.0 55.5748502994 76% => OK
Nominalization: 17.0 16.3942115768 104% => OK
Performance on vocabulary words:
No of characters: 2184.0 2260.96107784 97% => OK
No of words: 398.0 441.139720559 90% => More content wanted.
Chars per words: 5.48743718593 5.12650576532 107% => OK
Fourth root words length: 4.46653527281 4.56307096286 98% => OK
Word Length SD: 3.05181912963 2.78398813304 110% => OK
Unique words: 219.0 204.123752495 107% => OK
Unique words percentage: 0.550251256281 0.468620217663 117% => OK
syllable_count: 688.5 705.55239521 98% => OK
avg_syllables_per_word: 1.7 1.59920159681 106% => OK
A sentence (or a clause, phrase) starts by:
Pronoun: 5.0 4.96107784431 101% => OK
Interrogative: 0.0 0.471057884232 0% => OK
Article: 13.0 8.76447105788 148% => OK
Subordination: 2.0 2.70958083832 74% => OK
Conjunction: 3.0 1.67365269461 179% => OK
Preposition: 7.0 4.22255489022 166% => OK
Performance on sentences:
How many sentences: 22.0 19.7664670659 111% => OK
Sentence length: 18.0 22.8473053892 79% => The Avg. Sentence Length is relatively short.
Sentence length SD: 48.0446589768 57.8364921388 83% => OK
Chars per sentence: 99.2727272727 119.503703932 83% => OK
Words per sentence: 18.0909090909 23.324526521 78% => OK
Discourse Markers: 4.0 5.70786347227 70% => OK
Paragraphs: 5.0 5.15768463074 97% => OK
Language errors: 3.0 5.25449101796 57% => OK
Sentences with positive sentiment : 8.0 8.20758483034 97% => OK
Sentences with negative sentiment : 2.0 6.88822355289 29% => More negative sentences wanted.
Sentences with neutral sentiment: 12.0 4.67664670659 257% => Less facts, knowledge or examples wanted.
What are sentences with positive/Negative/neutral sentiment?
Coherence and Cohesion:
Essay topic to essay body coherence: 0.192464043789 0.218282227539 88% => OK
Sentence topic coherence: 0.0492221410127 0.0743258471296 66% => OK
Sentence topic coherence SD: 0.0438757205626 0.0701772020484 63% => OK
Paragraph topic coherence: 0.0984771763138 0.128457276422 77% => OK
Paragraph topic coherence SD: 0.02040455344 0.0628817314937 32% => Paragraphs are similar to each other. Some content may get duplicated or it is not exactly right on the topic.
Essay readability:
automated_readability_index: 13.5 14.3799401198 94% => Automated_readability_index is low.
flesch_reading_ease: 44.75 48.3550499002 93% => OK
smog_index: 8.8 7.1628742515 123% => OK
flesch_kincaid_grade: 11.5 12.197005988 94% => OK
coleman_liau_index: 14.27 12.5979740519 113% => OK
dale_chall_readability_score: 9.21 8.32208582834 111% => OK
difficult_words: 118.0 98.500998004 120% => OK
linsear_write_formula: 8.0 12.3882235529 65% => OK
gunning_fog: 9.2 11.1389221557 83% => OK
text_standard: 9.0 11.9071856287 76% => OK
What are above readability scores?
---------------------
Rates: 58.33 out of 100
Scores by essay e-grader: 3.5 Out of 6 -- The score is based on the average performance of 20,000 argument essays. This e-grader is not smart enough to check on arguments.
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Note: the e-grader does NOT examine the meaning of words and ideas. VIP users will receive further evaluations by advanced module of e-grader and human graders.