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.
In the preceding statement the author claims that investment in precious metals such as gold and silver would prove to be the the best strategy for its firm based on previous several years experience and on projected economic growth of emerging markets. Though his claim may well have merit the author presents a poorely reasoned argument based on several questionable premises and assumptions, and based solely on the evidence he offers we cannot accept his argument as valid.
The primary issue with the authors argument lies with his unsubstantiated premises. Although it might be true that his firms most profitale investment starategy in the past has been the investment in precious metals the author fails to give reasons for the the success of the firm in such investments. He has also failed to back his argument regarding the increase in demand for these metals, in the future, in emerging markets. A trend of economic growth does not neccessarily correlate directly with an increase in demand for precious metals. Hence the author's premise, the basis of his argument lack any legitimate evidentiary support and renders conclusion unacceptable.
In addition the author makes several assumptions that remain unpoven. The author assumes that a trend that has existed in the past will continue through the next decade. However top analysts have stated that gold and silver are already overvalued in the market and predicted that a correction is due. The author also only talks about the demand of precious metals and has failed to take the supply of these metals into account. New Gold mine discoveries in South Africa and India are bound to come online in the next couple of years increasing the supply of these metals. The author hence further weaken his argument by making assumptions and failing to provide details to back his assumptions.
In sum the authors argument is based on unsupported premises and unsubstantiated assumption that render his argument invalid. If he would like to convince his reader he needs to provide more data regarding the forecasted market supply of these metals and correlate it with the expected demand. He further needs to back his premise with more substantial evidence regarding the emerging markets.
If the author truly hopes to change his investors' minds on the issue, he would have to largely restructure his argument, fix the flaws in his logic, clearly explicate his assumptions, and provide evidentiary support. Without these things, his poorly reasoned argument will likely convince few investors.
"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.
In the preceding statement the author claims that investment in precious metals such as gold and silver would prove to be the the best strategy for its firm based on previous several years experience and on projected economic growth of emerging markets. Though his claim may well have merit the author presents a poorely reasoned argument based on several questionable premises and assumptions, and based solely on the evidence he offers we cannot accept his argument as valid.
The primary issue with the authors argument lies with his unsubstantiated premises. Although it might be true that his firms most profitale investment starategy in the past has been the investment in precious metals the author fails to give reasons for the the success of the firm in such investments. He has also failed to back his argument regarding the increase in demand for these metals, in the future, in emerging markets. A trend of economic growth does not neccessarily correlate directly with an increase in demand for precious metals. Hence the author's premise, the basis of his argument lack any legitimate evidentiary support and renders conclusion unacceptable.
In addition the author makes several assumptions that remain unpoven. The author assumes that a trend that has existed in the past will continue through the next decade. However top analysts have stated that gold and silver are already overvalued in the market and predicted that a correction is due. The author also only talks about the demand of precious metals and has failed to take the supply of these metals into account. New Gold mine discoveries in South Africa and India are bound to come online in the next couple of years increasing the supply of these metals. The author hence further weaken his argument by making assumptions and failing to provide details to back his assumptions.
In sum the authors argument is based on unsupported premises and unsubstantiated assumption that render his argument invalid. If he would like to convince his reader he needs to provide more data regarding the forecasted market supply of these metals and correlate it with the expected demand. He further needs to back his premise with more substantial evidence regarding the emerging markets.
If the author truly hopes to change his investors' minds on the issue, he would have to largely restructure his argument, fix the flaws in his logic, clearly explicate his assumptions, and provide evidentiary support. Without these things, his poorly reasoned argument will likely convince few investors.
