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

The letter indicates that the northeastern United States experience long below-average temperatures last year and this phenomenon was predicted to be continuing in the following years. Since the area traditionally adopts oil as their major resource for heating and more houses are built, the author concludes that investing in Consolidated Industries would be a good choice. However, there is insufficient evidence which renders the recommendation unconvincing.

First of all, the letter mentions that the area traditionally uses oil as a major fuel. Nevertheless, there is no direct causation between using oil for the past years and high benefit of the oil company in the future. It is possible that residents in the area are changing and do not follow the old customs anymore. Then, they might adopt electricity as their major resource for heating at next year. Therefore, investing in an oil business, Consolidated Industries, might not gain abundant wealth.

Secondly, the author cites that some new houses were constructed in the last year. Nonetheless, there is no obvious relation between new houses and earning money from local business. Probably, those houses are still empty which means no inhabitants using oil in those houses. Furthermore, if those houses have been occupied since last year, the oil sales are already included in the last year, which means the oil business might not sell more oil than the last year. Hence, the demanding of heating fuel would not increase and thus infusing in the oil company might not worth.

Finally, the writer asserts that Consolidated Industries which sell heating oil as their major business. Notwithstanding, there is no specific connection between the firm sells needs of local people and this company can earn ample profit. Perhaps, Consolidated Industries might not be the biggest and most lucrative company in the northeastern United States. There could be other enterprises which receive a large proportion of orders for oil fuel. In other words, the other firms earn the most profit of selling heat resource and Consolidated Industries might not benefit. As a result, there might be other enterprises which can be invested and earn more interest than investing in Consolidated Industries.

To sum up, there are not enough evidence in the argument which can validate the recommendation, investing in Consolidated Industries could be profitable. To bolster the argument, the writer should provide more information about the major resources which are adopted in recent years, the thorough investigation of occupied condition of new houses, and the most lucrative company selling fuel resources in the northeastern of United States.