Investing Basics

Shotgun Arguments: How to Spot a Fallacy in a Visual Investment Presentation

Any time an investor is confronted with a cluster of charts grouped together in a presentation, it is possible the presentation contains misinformation. Some industry professionals may use shotgun arguments to sell the idea that investing is easy, and that buying and holding will ensure eventual gains.

The Hallmarks of a Shotgun Argument

Like shotguns—which blast a spray of pellets instead of a single projectile— presentations that are dominated by dozens of charts and graphs can overwhelm an intended target. If the presenter is not particularly accurate it often goes unnoticed.

Misinformation is easier to conceal within a barrage of charts and graphs.

The barrage of information helps to conceal inconsistencies. On the rare occasions that investors can identify inaccuracies, missing or one sided information for example, the problem is often so data-sensitive that investors find it nearly impossible to research and study those inaccuracies sufficiently.

The end result is that misinformation gets lost in the clutter, investors accept the presentation as fact and proceed with a potentially faulty strategy.

Shotgun arguments can conceal many pieces of misinformation.

Investors should educate themselves on the primary fallacies found in investing presentation charts and graphs, because as we saw in 2007-2009 things aren’t always ok.

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