15.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."
In this argument, the arguer claims that foods sales of Old Dairy Industries (OD) are probably to decrease greatly and their profits will lessen necessarily so that the OD stockholders and other investors should not invest in this company any more. To bolster his advice he cites a survey which shows that many people have a degressive desire of buying foods high in fats and cholesterol, which are kind of OD's products, and the fact that many food stores are crammed with low-fat foods. Actually this argument rests on a series of unsubstantiated assumptions, and therefore unpersuasive as it stands.
First and foremost, the arguer does not offer the demographic profile of the survey's respondents, which weakens this argument. It is possible that most of the respondents are suffering physical problems so that they get the doctor's advice of rejecting foods containing fats and cholesterol. What's more, they have a desire to do so doesn't mean that they are necessarily do as their longing. Sometimes people can't help purchasing worthless things.
Secondly, the fact that low-fat products abound in many food stores doesn't substantiate a decreasing sales amount and depressive profits of OD. Perhaps the sales amount of other OD products increase to a larger extent so that the total amount may increase or maintain. It also can be the case that people would like to buy OD food online for the lower price so that the food stores takes a few OD foods. Furthermore, the profits depend not only on the revenue but also on the expenditure; therefore it may be the case that the expenditure declines in a greater amount than the revenue so that the profits of OD will not decrease.
Last but not least, the arguer fails to take into consideration that OD may works out a new proposal for further development. Perhaps they will reduce the price of their foods by cutting down the cost, or decrease the content of fats and cholesterol to attract more customers. In that point, the stockholders have no need to sell their shares.
In summary, this argument is based on mere speculation with absolutely no cause and effect evidence presented to show that OD will have a deficit and people should not invest it any more. In addition, to better evaluate the argument I would need to know the profile of the respondents to make sure the survey is reasonable and whether OD is making a loss and does not have the plan of remediation.