GMAT Essays (AWA)

Hi Everyone,

Please help me to review my essay. I have my GMAT exam next week.

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The following appeared in a strategy memorandum of an investment company:

"Over the past several years, investment in precious metals, such as gold and silver, has proven to be one of the most profitable investment strategies for our firm. Over the next decade, the demand for these metals is expected to be strong, largely driven by the economic growth of large emerging markets--China, India, and Russia. Thus, our investors are best served by increasing their exposure to precious metals to take advantage of this unique profit-making opportunity."

Discuss how well reasoned you find this argument. Point out flaws in the argument's logic and analyze the argument's underlying assumptions. In addition, evaluate how supporting evidence is used and what evidence might counter the argument's conclusion. You may also discuss what additional evidence could be used to strengthen the argument or what changes would make the argument more logically sound.

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In the preceding argument, the author cites that the demand for precious metal such as gold and silver is expected to be strong in next decade and concludes that company's investors are best served by increasing their exposure to precious metals to take advantage of unique profit-making opportunity. At the very first look this seems to be an obvious solution but on a closer look, the argument is based on questionable assumptions and premises that make it not only flawed but also unconvincing at it stands.

The primary issue with the argument is the unsubstantiated premises. The author has made an analogy between past and future and claimed that that the investment strategies that generated profit in the past will generate profit in future. It is not necessarily true that something which worked in past will work in future. Moreover, she claimed that the economic growth of large emerging markets such as China, India, and Russia will create demand for precious metal. She has not provided any proof on 'how' the economic growth of large emerging market will create demand for precious metal? The author has made her point based on unsupported premise that render her conclusion invalid.

Additionally, the author in the argument made a questionable assumption. She claimed that investors are 'best' served by increasing their exposure to precious metals to take advantage of this unique profit-making opportunity. Here, she made an assumption that there is no other opportunity that can generate similar or more profit that investment in precious metal. This assumptions has not been supported by any evidence as there could be other investment options such as investment in technology, bio-medical science etc., which can generate more or similar profits. The author has made her point based on questionable assumption that makes her conclusion weak.

Although the argument has unsupported and questionable premise and assumption, It is not to say that argument is without base. It may be possible that economic growth of large emerging market will spur the demand of precious metals and investment in precious metal will turn out to be best strategy, but without any proper evidence and support, the argument is currently unconvincing. The author can corroborate her point by providing evidence on how the economic growth of large emerging market will create demand for precious metal and there is no other investment strategy which can generate similar profits.

In sum, currently the argument is weak and flawed. If author wishes to make her point strongly, she needs to largely restructure her argument. She needs to provide additional evidence to support here unsubstantiated assumptions and premise. Without these improvement, the argument is likely to convince very few people.

Its a definite 5 for me if not 6 . Very well argued.

The flaws which had to be pointed were

1. Over generalisation
2. Lack of evidence (unsubstantiated)
3. Reasoning was inconclusive
4. strong words like best,unique without ample proof.

Hope it helps.