Relative Performance in a Time of Crisis By Howard Simons About this article: The most dangerous words in finance are, "It is different this time." These words generally are uttered in justification of a bubble, real or imagined. But while assuming human nature and market cycles are different is just asking for it, any market analyst must pose the question statistically on a continuous basis. The ability to assess whether a set of relationships has changed over a period or whether a directional move is in fact statistically significant is a partial defense against, in Nassim Taleb's words, being fooled by randomness. Without such rigor, any lucky commentator can make his or her umpteenth call of a bottom over a two-year bear market and then run around like he or she discovered America when the market finally rises. Consistent and statistically non-zero correct calls over a period of time are required to tell us whether anyone is adding value... Or, call us at 1-866-321-TSCM (8726) Monday-Friday, 8 a.m.-6 p.m. ET. Outside the U.S. and in Canada, call 1-212-321-5200.

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