How can we "play defense" like Cramer suggests?

BryanPerry answered 3 months ago …

In terms of the recession, playing defensively means choosing stocks of companies that will either profit directly from the economic downturn or in spite of it—traditionally, healthcare, consumer staples and the like.

I've actually been targeting names that are profiting BECAUSE of the recession and fiscal tightening by buying call options on companies that are in the outsourcing space.

Our newest position in my Tactical Trader service is a management consulting and technology outsourcing firm that has been benefiting from the current economic downturn. It makes sense to look to these names because most companies aim to cut costs and streamline operations, and those that facilitate outsourcing are winning.

This particular company boasted $6.77 billion in new bookings in its most recent quarter.

The stock's 14 times forward P/E is lower than the 18 times forward P/E than its industry competitor, Electronic Data Systems (EDS), and it has a strong balance sheet, with about $3.4 billion in cash and investments.

I like to buy deep in-the-money-call options because they require far less capital while offering more leverage than buying the stock outright.