Message from the President

Dear Colleagues and Friends,

Mark J. Andrusis, CFA
Mark J. Andrusis, CFA
President, CFA Society Baltimore

It gives me great pleasure to share with you the tenth edition of the Baltimore Business Review. This publication represents an important partnership between the business and academic communities in Baltimore and its adjoining metropolitan areas. CFA Society Baltimore is grateful to have such a great partner in the Towson College of Business and Economics to make this world-class publication possible.

I want to thank the many individuals who have worked tirelessly to bring this issue to reality. I want to thank the editorial staff of Farhan Mustafa from CFA Society Baltimore and Jian Huang and Lijing Du from Towson University. I would also like to extend a special thank you to many of the contributors to this year’s edition and to Rick Pallansch and Chris Komisar from the Towson University Creative Services team. Your time and efforts are warmly appreciated.

The CFA Society Baltimore traces its history back to 1948 and serves over 750 members today. The society proudly leads the investment community locally by promoting the highest standard of ethics, education, and professional excellence all for the benefit of our community. Participation and membership in the CFA Society Baltimore is open to all professionals dedicated to these standards. Adjacent to this message, you can see a list of the top ten employers of our society’s members.

While CFA Society Baltimore advocates and promotes the principles of the CFA program, we are a professional organization. Our vision for the society includes expanding membership to other finance-related and non-finance professional, including financial advisors, registered investment advisors, accountants, actuaries, and lawyers, just to name a few. Living in Smaltimore, we hope to create a mutually beneficial organization and learn from one another, best serve our respective clients, and advance our professional careers and personal networks.

We at CFA Society Baltimore work hard to create valuable educational, networking, and soft skills training programs for our membership and future members. We hope to engage in conversations about timely topics and trends impacting the financial services industry. We cordially invite you to join us at one of our frequent speaker events or our upcoming Future of Finance Conference.

Please enjoy this excellent publication. As always, we would welcome your feedback and insights. To learn more about how CFA Society Baltimore can help support your career and professional network, please visit our website or find us on social media.

Mark J. Andrusis, CFA
President, CFA Society Baltimore

Message from the Dean

Dear Colleagues and Friends,

Dean KaynamaI take great pleasure in sharing with you the annual issue of the Baltimore Business Review: A Maryland Journal. With the inaugural issue in 2010, this marks our tenth year of partnership with the CFA Society Baltimore. Year after year, Baltimore Business Review has made it possible for the academic and professional worlds to be fully connected to each other and to be directly involved in the Baltimore and Maryland business communities and beyond.

Consistent with our vision, this issue creates a variety of topics that are relevant, challenging, thought-provoking, and inclusive of a diverse range of voices and perspectives, including scholars, local business practitioners, students, and other open-minded contributors. In this issue, we present the impact of the Tax Cuts and Jobs Act (TCJA) on low-income families in Maryland, which is a very relevant and interesting reading. Further, we focus our attention on how we can protect Maryland’s voting process and mitigate potential cyber vulnerabilities to be extended to industries at large. You will also find other studies collaboratively produced by faculty and students addressing topics such as the contribution of the Maryland startup community to job creation and determinants of college student consumption in Maryland. Finally, we are proud to showcase an update from the Towson University Investment Group on the survey portfolio they created.

The strength of our journal lies with a strong editorial board and with active and high-quality contributors and interested readers. We are delighted that you are joining us as readers, and would like to appreciate your feedback and impressions of this publication.

Best regards,

Shohreh Kaynama's signature

Shohreh A. Kaynama, Ph.D.
Dean, College of Business and Economics

The Startup Ecosystem in Maryland

a technician works on a server

Matthew Q. Lowinger
Lead Associate of Student Launch Pad
Towson University

Jan Baum
Director of Center for Innovation and Entrepreneurship
Towson University

Maryland is a hub for innovation and entrepreneurship possessing a large ecosystem of STEM professionals, a high density of technology companies, and significant research and development spending per capita, leading Forbes to rank Maryland as the second most innovative state behind only the District of Columbia in 2017 (WalletHub, 2017). Maryland’s diverse landscape in terms of business sectors, proximity to the District of Columbia, and educational institutions have been contributing to Maryland’s rise in national rankings. Job creation in the startup sector in Maryland is multiplying, and along with a dynamic innovation and entrepreneurial ecosystem, more startups continue to start in or relocate to the great state of Maryland.

In this article, we first describe the thriving startup sectors in Maryland, and expand the discussion to higher education institutions. Then, we summarize the implication of venture financing in the last section.

Continue reading “The Startup Ecosystem in Maryland”

How Towson University Students Would Invest $100,000

Dollar bills stuck in the ground, as if they are growing from the ground, next to a trowel

Dylan Vasbinder
President, Towson University Investment Group

Tyler Simonds
Portfolio Manager, Towson University Investment Group

Chris Breen
Vice-President, Towson University Investment Group

The Towson University Investment Group (TUIG) conducted a research survey that asked participating students what five stocks they would invest in if they had $100,000. We then created two hypothetical portfolios based on the top 50 stock votes. Continue reading “How Towson University Students Would Invest $100,000”

A Beginner’s Guide to Navigating Through Lost Profits in Corporate Litigation

the scales of justice and money

By Zachary C. Reichenbach, CFA, CPA/ABV/CFF
Principal, Ellin & Tucker

Cazmier Tymoch
Analyst, Ellin & Tucker

We live in a highly litigious business environment. For those of you who have been involved in a business litigation matter know that the litigation process can be time consuming and very expensive. Litigation cases can take years to resolve and in the process, attorneys and other professionals may incur thousands of hours to litigate the case. Additionally, time and resources may be taken away from business operations if employees need to get involved. This article will introduce the concept of lost profits in corporate litigation and underscore the importance of good record-keeping and detailed financial documents to help you manage through any future litigation.

Continue reading “A Beginner’s Guide to Navigating Through Lost Profits in Corporate Litigation”

Determinants of College Student Consumption in Maryland

three young people sit on a wall looking at their mobile phones with shopping bags at their feet

Melissa A. Osborne Groves, Ph.D.
Associate Professor, Department of Economics
Towson University

Kai Johnson
Undergraduate Student in Economics
Towson University

Have you ever wondered why you bought that ugly Christmas sweater or why your sister grocery shops online? These were the types of questions that motivated our research on the determinants of college student consumption. We asked ourselves why some students make the spending decisions that they do, and what accounts for differences among students, realizing that from an economic perspective how people make decisions about even a Christmas sweater can have a significant and lasting economic effect. We reviewed the existing literature and surveyed students at Towson University in the Fall of 2018 to better understand the economic relationship between social media, materialism and consumption choices for students at a competitive regional public university. Continue reading “Determinants of College Student Consumption in Maryland”

Understanding the Tax Cuts and Jobs Act for Maryland Lower-Income Families

top of IRS form 1040 overlaid with quarters

Zhen Zhang, Ph.D., CPA
Assistant Professor, Department of Accounting, Towson University

On December 22, 2017, Congress passed, and the President signed the Tax Cuts and Jobs Act (TCJA). The TCJA is one of the largest tax cuts in the U.S. history. A recent study by the Tax Foundation estimates that, on a conventional basis, TCJA will reduce federal revenues by about 638 billion over the next decade. Continue reading “Understanding the Tax Cuts and Jobs Act for Maryland Lower-Income Families”

The New Tax Law and the Effect on Values for Privately Owned Businesses

The US Capitol dome set again 100 dollar bills

Zachary C. Reichenbach CFA, CPA/ABV/CFF
Ellin & Tucker

Bradford Muir
Ellin & Tucker

The Tax Cuts and Jobs Act of 2017 (TCJA), signed into law a year ago on December 22, 2017, has had several direct effects on valuations of privately owned businesses. This article will explore the TCJA’s effects on valuations of privately owned C Corporations and the ways business appraisers are modifying components of two of the common valuation methods — the income approach and the market approach — to account for these changes.

This article will specifically discuss how the TCJA changed the effective corporate tax rate, generally increasing the value of privately owned businesses. The adjustments being made to the cost of capital calculation, discount rates and changes to methods under the market approach will also be outlined.¹ Continue reading “The New Tax Law and the Effect on Values for Privately Owned Businesses”

The Status of Women in Management

silhouette of woman overlooking a city skyline

Nicola Daniel
Executive Director, CFA Society Baltimore

In 2018 CFA Society Baltimore hosted our first conference, CFA Society Baltimore Alpha and Gender Diversity 2018. Our theme was chosen to reflect an increased focus in many asset management firms on mentoring young professional women up the ranks and on retaining them as they enter mid-career. At the conference, former presidential candidate and CEO of Hewlett Packard Carly Fiorina delivered a nuanced keynote address discussing her career trajectory and the challenges she encountered on her path to the C-suite. Continue reading “The Status of Women in Management”

Protecting Maryland’s Voting Processes

the backs of voters at voting booths

Megan Price
Business Administration Graduate of Towson University

Natalie M. Scala, Ph.D.
Assistant Professor and Graduate Program Director at Towson University

COL Paul L. Goethals, Ph.D.
Academy Professor at the United States Military Academy

The Help America Vote Act of 2002 made sweeping reforms to the nation’s voting processes to include replacing electronic voting equipment and phasing out paper punch cards, the latter of which became a point of contention during the 2000 Presidential election (US EAC, 2018). The integrity of the new electronic systems was not challenged until the 2016 Presidential election, when the Department of Homeland Security admitted that the voting systems from 21 states, including Maryland, were targets of attacks (Horwitz, Nakashima, and Gold, 2017). Such news, along with continued mainstream media reporting regarding interference by and continued potential for a foreign actor or nation state to influence or destabilize the outcome of an election, has led to concern about the integrity of voting processes (NYT, 2018). Continue reading “Protecting Maryland’s Voting Processes”