How do you choose stocks?

Picard’s arguments on media financing and the capital market represent the importance of financial management in terms of its ability to influence media performance, especially considering the financial and economic health of media firms. The stages of financial management (Ch. 8) inform us about how companies perform most effectively. Such stages are important for not only companies but also for individuals who intend ultimately to maximize their wealth. However, would individuals choose media products based solely on profit maximization? This is an interesting angle. It pays attention to individuals’ distinct personality, age, and background as factors that influence their investment decisions. Thus, not only individuals’ desire to maximize profit, but also their psychological and sociological dimensions could influence the financial and economic health of the market. Therefore, if we need to consider the behavior of individual players in the market, would the stages change? What else should we consider for each stage, including cash flows?

In chapter 9, Picard argues the new media shares in view of the stock markets. As he mentioned, while the new media has the potential for significant growth and future profitability, its low financial performance hinders further large investments. In a sense, to what extent does the future “potential” and current “uncertainty” of the new media influence the stages of financial management? Would it be different from the stages for traditional media?

As mentioned in chapter 12, media firms can be evaluated differently, regardless of their health, as seen in terms of market share; however, the defining financial and economic health of media firms could differ depending on market circumstances. In such a complicated and competitive media environment, how we have strong indicators for evaluating media firms’ health. Also, in such competitive media circumstances, which factors or indicators would be more important for market leader and market followers, respectively, for their financial and economic health?