It’s hard to believe, but this July marks the ten-year anniversary of the collapse of Bear Stearns’ two sub-prime hedge funds, the first of a succession of events that eventually culminated in the worst economic downturn in the US since the Great Depression.

While the recovery since has been anything but robust, the more the Great Recession recedes in dealmakers’ memories, the more challenging it is to recall what happens when credit markets seize up. Despite the seeming boost of confidence the new administration has provided for US companies, the rule of business cycles still holds.

Cyclicality – For experienced asset managers, it’s no stretch to suggest that corporate risk is divided between companies that are cyclical, and those that aren’t. Or more accurately, those that are cycle-correlated and those that are cycle-resistant. The trick, of course, is to know which borrowers fit into which categories.

It’s helpful to have historic numbers for the borrower through the 2007-09 period, but that’s increasingly rare. Even when revenues are available, the refrain often heard from selling bankers is, “That was ten years ago. It was a different company then.”