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# Would be happy to get a feedback on my AWA

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Intern
Joined: 05 Mar 2014
Posts: 6
Followers: 0

Kudos [?]: 2 [0], given: 3

Would be happy to get a feedback on my AWA [#permalink]

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08 Apr 2014, 00:24
Hey everyone, thanks for giving me feedback on one of these two essays. It's really helpful and I appreciate your time a lot.

[Reveal] Spoiler: Essay 1
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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To propose his conclusion that the investment companies customers are best served by increasing their exposure to gold and silver, the author argues with their past investment strategy as well as with an emerging markets demand that he see's over the next decade. The arguments and therefore the conclusion can be considered questionable as the authors misses to address certain concerns within his argumentation.

The author's claim that investing in precious metals like gold and silver is profitable, relies according to him upon a strong demand of these metals in China, Russia and India. This assumption doesn't adress the following three points. Although the growth of emerging market economies is usually higher than in mature economies like Germany oder the USA, it still strongly depends on them through strong trade patterns. Thus the worlds ecomony is as important for the demand and therefore the price of commodities as with all other trading goods. As commodities on stock markets usually decrease when the economy is strong, a large demand from emerging markets will eventually not have the strong positive effect on the prices as the authors assumes. Another flaw in the author's argument is that he concludes the investment to be beneficial in the future by considering the past when he states that the investment was profitable over the past several years. The stock market is volatile and very hard to predict, only based on it's former price performance.

Alltogheter, as it leaves out several key aspects, the argument isn't persuasive or sound. If the concerned discussed above were adressed, the argument would have been better reasoned and thus stronger.

[Reveal] Spoiler: Essay 2
The following appeared as part of an annual report sent to stockholders by Olympic Foods, a processor of frozen
foods:
“Over time, the costs of processing go down because as organizations learn how to do things better, they become
more efficient. In color film processing, for example, the cost of a 3-by-5-inch print fell from 50 cents for five-day
service in 1970 to 20 cents for one-day service in 1984. The same principle applies to the processing of food. And
since Olympic Foods will soon celebrate its 25th birthday, we can expect that our long experience will enable us to
minimize costs and thus maximize profits.”

-------------------------------------------------------

The author’s conclusion that Olympic Foods can expect to minimize costs and thus maximize their profit overlooks important concerns about the arguments stated and must therefore be considered questionable. It is inferred from a statement at the beginning, that all companies become more efficient over time which the author tries to prove by an example that describes a different product and a different industry. This alone does not constitute a logical argument in favor for the reduction of costs of processing within all organizations and certainly doesn’t support or prove the author’s main conclusion.

Most important the argument states that in all organizations time leads to higher efficiency, it compares two very different forms of processing, namely food and film and it claims that lower costs necessarily lead to higher profits. First, the argument assumes all organizations and their products are similar and therefor the production becomes more efficient as organizations learn about the process. In a weak attempt to support this assumption the author gives the example of consumer film processing in stores between 1970 and 1984 and the price reduction that occurred over time. Two flaws are inherent in that claim. Industries differ from each other in terms of maturity, use of technology, size, market and others. It is for example easier to improve production processes when the industries maturity isn’t very high, so that processes still have a lot of room for improvement. That might have been the case with film processing, which has not been available for a long time in 1970. The second flaw is that the price reduction only came from higher efficiency and lower costs. Other aspects such as a higher number of competitors or economic circumstances might have also played an important role in the price reduction which then might only have led to a reduction in the margin and not to higher profits. This possibility also proves the final claim in the author’s argument wrong, that the reduction of costs lead to higher profits. If Olympic Foods reduces costs it might also reduce quality and thus might lose market share which would reduce revenue and profits.

Due to the fact that the argument highly depends on flawed logic, it is not sound or persuasive. It would have been more convincing if examples from the same industry were provided.
Manager
Joined: 20 Dec 2013
Posts: 125
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Re: Would be happy to get a feedback on my AWA [#permalink]

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08 Apr 2014, 23:15
Content-wise, the essay is fine. However, it is under length. You need atleast 5 paragraphs. The first and last for the introduction and conclusion respectively. The middle three paragraphs should focus on three major reasons why the argument is weak.

Some of these reasons can be fallacious assumptions, incorrect analogies, problems in the research conducted or data cited etc. BAsed on what has been written, you will get 5/6.
Intern
Joined: 05 Mar 2014
Posts: 6
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Kudos [?]: 2 [0], given: 3

Re: Would be happy to get a feedback on my AWA [#permalink]

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10 Apr 2014, 02:51
Thanks @PerfectScores for the reply. I will try to improve the structure of my essays. However for the first topic I found it not as easy as with other essay questions to find the weaknesses. I'll post another one within the next days to see if the structure improved.
Re: Would be happy to get a feedback on my AWA   [#permalink] 10 Apr 2014, 02:51
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