# "if-only" vs. "ceteris paribus" defense

I’m having issues differentiating one from the other…based on the readings these are as follows: “If-only” - basically means that if this didn’t happen, then I would have been right “ceteris- paribus” - in a nutshell means that something else occured that made me wrong. However, to me they mean the exact same thing just stated slightly differently. Especially if you refer to Schweser Self-Test: Behaviour Finance Question 4. The answer is C. Historical counterfactual defense which is basically “if-only” defense. But in their reading on pg. 175 the example used to define “ceteris-paribus” is pretty much exactly the same as in the case but they decided to call it “if-only” defense. Anyone have any insight on how to differentiates these???

certeris-paribus translates to “all else equal” which differs slightly from "if only ". all else equal meaning if this didn’t change i was right, while ‘if only’ flows along the lines if this didn’t happen i would’ve been correct… i haven’t gotten schweser (yet) so i am going to assume the key differnce might be that ceteris paribus might take into account many things (plural) were as if only might be a singular? sounds too simple and i could be way off - like i said, i haven’t looked at this material, so assume i’m wrong until otherwise proven (in this case, haha)

ceteeis paribis basically means “continue your analysis assuming everything else is normal”. If only X means “continue the analysis or comparison assuming only X is different”

It’s easier to view them as polar opposites. If Only: I would have been right had Event X happened. Ceteris Paribus: I would have been right had Event X not happened. The Ceteris Paribus argument isn’t about “something else” occuring. It’s about an event that failed to occur.

Joemontana - awesome explanation. thanks!

yes, thanks Joe for the clarification.

Joemontana - Your example make sense only in the context of the CFAI material. However, the Schweser notes explain that the “if-only” defense is when an analyst suggests that if “something or other had or hadn’t happened, their forecast would have been accurate”. I’m still confused on this issue as a result.

I haven’t done this particular reading yet, but it sounds like “if only defense” is backwards looking, whereas the ceterus paribis explanation is foreward projecting. Ceteris paribis means that “assuming all else is equal (normal, meaning that no variables do anything terribly surprising),” your analysis will hold. Now fast forward 6 months. Something unexpected happened, and your analysis didnt work out as expected. It tunrns out that the ceterises weren’t paribussed. Now you point out that you are still a competent analyst with the defense that your analysis would have been reasonable “if only” X hadn’t happened or if only Y had gone as planned. How you evaluate this is important, because you want to evaluate a decision process based on how sensible decisions were made at the time they were taken, and with the information available at the time. Very often, people are fooled by outcome bias, where you assume that decisions were good because a fund had a good year, which may or may not be true, or vice versa.

I was finaly able to sort this out with Dr. Kuhlman. These defenses are both backwards looking. “if-only” has more to do with anaylists recommendations, for example, if only you had listned to my recommendation… ceteris-paribus has to do with an unexpected outside event., ie. sudden increase in interest rates. They have since posted an errata for Self-Test: Behaviour Finance Question 4. Even though the answer is still C, the explanation is now refering to the example as ceteris-paribus and NOT “if-only”.