Exercise 1.4b

This time you'll just need 1_4.txt text file. It's probably already on your Desktop. Remember to click the  button to open it in Araucaria. See the instructions for 1.1c if you need help. No need for a scheme file for this one! And you don't have to post this one to your group...but go ahead if you'd like to!

1. An Easy One: Open Araucaria and redo the Dark Chocolate problem you saw in the tutorial. Try to do this one so that you get one big diagram. If you need help, recheck how it was done in T1.4. It should look something like this in the end:


But don't copy this image. Do the work yourself...your picture will be colored differently! (There's no need for the blue color.)





2. Field Work: Find an interesting argument like this in the local newspaper. It might be an account of how the Lions can improve by changing their management. Or a critique of the current president's plans. But make sure that you can find an easy way to state the argument as I've done with the chocolate one. Then, write the argument down in word processor and save as a text (.txt) file on your desktop and diagram as above. (Hint: you can easily do the saving in a text editor like Window's Notepad. But any word processor will do so long as you save as a text file.)

3. A little harder: Try this one from Slate 1/10/07 (http://www.slate.com/id/2157319/?nav=ais) :

Whatever you do, do not buy the 10 Stocks To Buy Now, at least not because you read about them in some magazine. If you want to buy the magazine, fine, just don't buy the stocks.

Why not?

First, because the only reason to buy individual stocks instead of funds is to try to beat the market, and there is no evidence that magazines are any better at selecting stocks that will do this than anyone else. Decades of research have shown that it is so difficult to beat the market that the odds that a professional investor will do it are between 1-in-4 and 1-in-40 (the difference depends on criteria, time horizon, start- and endpoints, and other factors). Common sense and anecdotal evidence, meanwhile, suggest that professional magazine editors are probably worse at picking stocks than professional money managers, if only because money managers pick stocks for a living and magazine editors don't. (Who would you rather hire to kick a game-winning field goal for your football team? A professional place-kicker or a sportswriter?)

Second, anything you read in an investment magazine (or hear on investment TV or radio) was "in the market" the moment the story appeared.

Do this one in the same way as 2. You probably want to simplify it a bit. But make sure you keep the main conclusion ("Do not buy the 10 Stocks to But Now...") and make sure you see there are a couple of independent reasons for this. Resason number one (after "First") itself is justified. So, you'll have more than one conclusion. The result should be a bit like the chocolate argument of 1. But it's a bit more complicated, I think. Araucaria Instructions: Again, copy the argument, paste into word processor and save as a text (.txt) file on your desktop. Then you can open this up in Araucaria. But remeber that you should probably simplify this a bit: Include only the essential premises and conclusions in your final diagram.