The following appeared in a letter from a firm providing investment advice for a client."Most homes in the northeastern United States, where winters are typically cold, have traditionally used oil as their major fuel for heating. Last heating season that

The argument with the conclusion that heating oil demand will increase and recommend invesment in Consolidated Industries is rather weak. It is based on the premises that most homes in the northeastern United States traditionally used oil for heating mostly, that climate forecasters predict that there will continue to be colder winter for several more years, that many new homes are being built in the region. However, it is logically flawed in many aspects. There are many hidden assumptions, as stated in the following paragraph.

First, the assumption that the climate forecasters have the right prediction, that is, heating season that region will experience 90 days with below-normal temperatures in several years. If it is true, providing that inhabitants in this region still use oil forheating, then the demand could be rising for the higher consumption to maintain the same warmth. However, if the preicition fails, the conclusion have high possibility to be wrong, regarding the fact less heating fuels needed.

Moremore, the assumption that most of the residents still use oil as main heating fuels as they used to be. The tradional way may be most effective way, as in many examples that the old wisdom make us startled. If it is the case, as the best and healthy way to live or preventing cancer, the conclusion can be ture. However, there may be new ways to heat, coming up with development of technology, such as device to heat through electricity. If the people prefer to novice tools, then the conclusion may fail.

What's more, the assumption that the new built homes were designed to use traditional way to heat, i.e. oil-based heating utility. Maybe for the lowered price, the high efficiency, or the proclivity of the habitants, the choice of the designers are these old way to heat, However, with the progress of the science and technology, building with modern facility might emerge. As a consquence, the recommendation is overestimated and wrong.

In the end, the argument is weak. However, if the assumptions that the climate forecasters predict the right climate tendency, that most of the residents still use oil as main heating fuels, and the new built homes were designed to use oil to heat are stated, it will be great reinforced. Therefore it is hard to be accepted. As for me, I won't give Consolidated Industries a chance, i.e. investing it.