TOBIN [2] in 1958 successfully developed a rationale for liquidity preference under the assumption of a two asset, i.e., cash and consols, monetary sector using the then new, but by now old hat, mean-variance approach to portfolio analysis. Scott [1] in 1957 using essentially the same, then new, approach attempted to explain the availability of credit phenomenon in a two asset world consisting of government securities and private securities. Both of these articles are properly considered because of their pioneering use of portfolio analysis, which has since come to dominate whole fields of analysis in economics and finance. As classics both articles have been reprinted in various books of readings, although the Tobin article has a clear advantage in number of reprints, probably both because its topic is of more general concern than Scott's, and because there are basic problems with the realism of the assumptions used by Scott.' However, if in addition, these articles are considered classics because the results obtained are still considered reasonable and realistic, then the profession is in error. Since the articles seem to be required reading for many courses both in monetary and macro economics, it is difficult not to believe that substantial numbers of students as well as teachers feel that their results are correct. The purpose of this note is to point out that their results indeed are not correct under more realistic assumptions, but using precisely the same analysis. The basic problem with both articles is the assumption that the relevant world is a two asset world. Simply by adding an appropriate third asset to both models, their results will be found to be in error. In Tobin's case, the two assets he considers are cash and consols. The obvious additional asset is some sort of short term security such as Treasury Bills. It is clear that if Treasury Bills are assumed to have zero capital value risk, they will dominate cash so that no cash will be held for liquidity preference purposes. But what will be shown here is that Treasury Bills will dominate cash even if they have some capital value risk, and thus there is even less likelihood of an existence of a speculative motive for cash when short term assets exist. Since Tobin's purpose was to corroborate Keynes' speculative motive for cash, using more realistic behavioral assumptions, the results including the third asset seriously question the usefulness of the more realistic Tobin assumptions. The problem is, of course, that since Keynes' time there has developed an array of short term assets (with little or no capital value risk) which dominate money for speculative purposes.