31. The following appeared as part of the business plan of an investment and financial consulting firm.
Studies suggest that an average coffee drinkers consumption of coffee increases with age, from age 10 through age 60. Even after age 60, coffee consumption remains high. The average cola drinkers consumption of cola, however, declines with increasing age. Both of these trends have remained stable for the past 40 years. Given that the number of older adults will significantly increase as the population ages over the next 20 years, it follows that the demand for coffee will increase and the demand for cola will decrease during this period. We should, therefore, consider transferring our investments from Cola Loca to Early Bird Coffee.
Discuss how well reasoned... etc.
In this argument a consulting firm recommends the transfer of investments from Cola Loca to Early Bird Coffee because, during the next 20 years, coffee demand will increase while cola demand will decrease. This prediction is based on the expectation that the number of older adults will significantly increase over the next 20 years, together with statistics, reportedly stable for the past 40 years, indicating that coffee consumption increases with age while cola consumption declines with increasing age. For three reasons, this financial advice may not be sound.
First, the argument assumes that relative supply conditions will remain unchanged over the next twenty years. However, the supply and cost of cola and coffee beans, as well as other costs of doing business as a producer of coffee or cola, may fluctuate greatly over a long time period. These factors may affect comparative prices of coffee and cola, which in turn may affect comparative demand and the value of investments in coffee and cola companies. Without considering other factors that contribute to the value of a coffee or cola company, the firm cannot justify its recommendation.
Secondly, the argument fails to account for the timing of the increase in coffee consumption. Perhaps the population will age dramatically during the next five years, then remain relatively flat over the following 15 years. Or perhaps most of the increase in average age will occur toward the end of the 20-year period. An investor has more opportunity to profit over the short and long term in the first scenario than in the second, assuming the investor can switch investments along the way. If the second scenario reflects the facts, the firms recommendation would be ill-founded.
Finally, the firm unjustifiably relies on the studies that correlate coffee and cola consumption with age. The firm does not provide evidence to confirm the reliability of the studies. Moreover, while the phrase studies suggest may appear to lend credibility to these claims, the phrase is vague enough to actually render the claims worthless, in the absence of any information about them.
In conclusion, the firm should not transfer investments from Cola Loca to Early Bird Coffee on the basis of this argument. To better evaluate the recommendation, we would need more information about the study upon which it relies. We would also need more detailed projections of population trends during the next 20 years.
神话故事:珀琉斯的婚礼
故事狮子和农夫
格林童话故事(23)
佛教的故事:The Quail King And The Hunter
儿童双语寓言故事:捕石头的渔夫
伊索寓言Lesson 35 The dove and the ant 鸽子和蚂蚁
佛教的故事:The Monkey King and the Water Demon
故事淘气的小老鼠
少儿英语故事:A Penny Collector
神话故事:不和之果与海伦
佛教的故事:The Birth Of A Banyan Tree
佛教的故事:The Dancing Peacock
故事:兔子的故事
伊索寓言Lesson 34 The dog and the wolf 狗和狼
神话故事:阿喀琉斯的后跟
格林童话故事(7)
双语笑话:你爸爸帮你了吗?
格林童话故事(2)
伊索寓言Lesson 32 Hercules and the waggoner 大力神与车夫
少儿英语故事:Her Doll Is Like Her
佛教的故事:Dirty Bath Water
少儿英语小故事:我让奶奶高兴了
少儿英语故事:Car in a Car Wash
少儿英语小故事:圣诞节晚宴上的餐前祷告
神话故事:普罗米修斯盗火
寓言故事:雌狐与母狮
佛教的故事:Wise Birds And Foolish Birds
伊索寓言Lesson 31 The young thief and his mother 小偷和他的母亲
伊索寓言Lesson 38 The horse and the ass 马和驴
少儿英语故事:Comics in the Newspaper
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