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In this argument, the author recommendsthat his/her client should invest fund in Consolidated Industries, one of whosemajor business operations is the retail sale of home heating oil, given theprediction that there will be an increased demand for heating oil. To supporthis/her recommendation, the author also mentions that most homes in thenortheastern US, where winters are typically cold, used oil as their major fuelfor heating. In addition, climate forecasters predict that long, cold weatherpattern will continue for several more years. New house are also being built inthe region to recent population growth. Thus, the author in this argumentconcludes the demand will increase and the client will benefit from theinvestment. While it may be true, the argument is rife with holes andassumptions, and thus, not convincing enough to lead to the conclusion.
First of all, the author doesn't provideadequate information to support his/her assertion that oil has beentraditionally used for heating. We don't know the actual amount of oil which isused for heating due to the cold weather. Perhaps the total value of it is notas considerable as the author has assumed. What's more, it is also unwarrantedto assume that this weather pattern will continue for several more years,lacking accurate data and scientific explanation. Thus we can easily cast doubton the validity of those climate forecasters' prediction.
Moreover, the argument also unfairly assumesthat those new homes, being built up in the region in response to recentpopulation growth, will continue use oil as their major fuel for heating. It istotally possible that new energy, such as solar energy and nuclear power, willtake the place of traditional heating oil. For instance, new houses underconstruction may all install solar panels instead of oil pipes, since solarenergy is cheaper as well as more environmental friendly. On this occasion, theauthor can not guarantee the increased demand for oil.
Even if those assumptions above can besubstantiated, it is still doubtful to presume that the increased demand foroil will certainly bring profits to invest in the Consolidated Industries. Theauthor just arbitrarily equates the correlation between with cause-and-effectrelationship. Other possible factors may also influence this investment.Perhaps from the market’s perspective, the company may face fierce competitionwith other competitors, as it can not promise to get profit from an increasedoil demand. On the other hand, from the company’s perspective, poor managementand rising operating cost will also bring negative impact on its balance sheet.
To sum up, the authorfails to establish a series of convincing assumptions in this argument. Inorder to solidify his recommendation, further data and information relating to theusage of oil as a major heating energy and the potential transformation ofweather pattern should be provided. Additionally, the author should also tellas which kind of energy new homes will prefer. Details about the conditions ofthe Consolidated Industries are also welcomed. |
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