Argument15.
Thefollowing appeared in a newsletter offering advice to investors.
“Over80 percent of the respondents to a recent survey indicated a desire to reducetheir intake of foods containing fats and cholesterol, and today low-fatproducts abound in many food stores. Since many of the food products currentlymarketed by Old Dairy Industries are high in fat and cholesterol, the company’ssales are likely to diminish greatly and their profits will be doubt decrease. Wetherefore advise Old Dairy stockholders to sell their shares and otherinvestors not to purchase stock in this company.”
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Inthis argument, the arguer concludes that the investors should not purchasestock of Old Dairy and the stockholders should sell their shares. To supportthe conclusion, the arguer cites the result of a recent study that over 80percent of the respondents wanted to reduce their intake of foods containingfats and cholesterol. In addition, the arguer provides the evidence that OldDairy Industries’ products are high in fat and cholesterol. This argumentsuffers from several critical fallacies.
Firstof all, the arguer cites the survey that over 80 percent of respondents whoprefer less fats and cholesterol. However, the arguer fails to provide anyinformation about the survey population; therefore it is impossible to determinewhether the survey results apply generally to Old Dairy. Moreover, we are notinformed how many people were surveyed but did not respond. The greater thisnumber, the less reliable the survey. Thus, as it stands the survey isstatistically unreliable and lends no credible support to the arguer’sconclusion.
Inaddition, the fact that many of the food products currently marketed by OldDairy are high in fat and cholesterol does not support the claim that thecompany’s sales are likely to diminish greatly and their profits will no doubtdecrease. Perhaps Old Dairy’s products have a large amount of loyal fans whoare willing to purchase their foods as before. Perhaps the company reducesexpenses to against the revenue decreased. Without weighing revenue againstexpenses the argument’s conclusion is premature at best.
Finally,the arguer unfairly assumes the feasibility of the conclusion that thenewsletter advice the stockholders to sell their shares and other investors notto buy stock in this company. However, this way maybe causes loss for theinvestors. If the current price is under the one investor bought then, sellingtheir shares means that investors will lose some money.
It is not as good as keeping theshares until the price increases. The investors should weigh the buying priceand selling price before determining the business.
Inconclusion, the argument is unconvincing me as it stands. To strengthen theargument, the arguer would have to provide evidence about the causalrelationship between the products which are high in fats and cholesterol andthe decrease of the profits. To better evaluate the argument, we would needmore information about revenue and expenses in this company. It is good forinvestors making decision instead of readily believing in investment advice
from newsletter.