TOPIC: ARGUMENT15 - The following appeared in a newsletter offering advice to investors.
"Over 80 percent of the respondents to a recent survey indicated a desire to reduce their intake of foods containing fats and cholesterol, and today low-fat products abound in many food stores. Since many of the food products currently marketed by Old Dairy Industries are high in fat and cholesterol, the company's sales are likely to diminish greatly and their profits will no doubt decrease. We therefore advise Old Dairy stockholders to sell their shares and other investors not to purchase stock in this company."
WORDS: 485
TIME: 00:45:00
DATE: 2010-8-1 12:04:47
提纲:1.回应者的回应不具备代表性 2.很多商店提供low-fat食品,不代表对它的需求量增大(可能是利润高,或者解决库存压力) 3.不能因为OD公司的产品是高热量就认为它不具备投资价值
The newsletter recommends that Old Dairy’s profit will no doubt decrease because of many people desire to buy some low-fat products while many products in Old Dairy Industries are high in fat and cholesterol. Thus, the author advises investors to sell their shares and stop investment. At first glance, the argument seems convincing, but after careful examination, I find the argument suffers from several logical flaws.
To begin with, the newsletter fails to assure me that the survey results accurately predict consumer's behavior. Without evidence that these respondents are representative of the overall population of people that always does the food shopping where Old Dairy's food are sold, it is hasty to draw my conclusion about people's daily shopping is tending to low-fat food rather than the food high in fat and cholesterol. Moreover, even if that population is generally satisfied, it is entirely that they would be even more satisfied with the food high in fat and cholesterol. Above all, consumers do not necessarily make food-purchase decision in strict accordance with their desires. From the standpoint of taste、nutrition and personal favor, maybe OD's products will be the first choice of consumers for their daily consume.
Secondly, the author hastily assumes that the demand of low-fat products is increasing on the basis that there are many stores supplying it. Yet, perhaps the low-fat food is in a high price that selling it will bring a large profit. Or, perhaps the distinct is a big processing plant for low-fat products, setting up a store is a solution to decrease the pressure of commodity stock. Thus, without stronger evidence that the consumers frequently buy low-food in these stores instead of the Old Dairy, the author cannot convince me that Old Dairy's sales would diminish greatly.
Thirdly, the mere fact that many Old Dairy's products are high in fat and cholesterol does not necessarily prove that their stock is not worth investing. According to the author's description, I presume that Old Diary is the primary food supplier in this distinct which is prestigious among the masses. Even if the food products currently marketed by Old Dairy cannot attract consumers, maybe some reformations like applying more low-fat food will make the company's sales come back to what is before or even more. The author's advice that the investors should sell the shares or not purchase stock will make the company bankruptcy, which will let more stockholders suffer from this commercial war. The author should advise the company to reform which will bring an advantage for everyone.
In sum, the recommendation is not well supported. To bolster it the author must provide specific evidence that it will be a wrong decision to invest the Old Daily Company. To better assess the strength of the recommendation I would need more information about the low-fat food’s sales status. It would also be helpful to obtain opinion from Old Daily’s observer.
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