Enter multiple symbols separated by commas

How to Play the Recession Game

"Wall Street is a brutal fashion show, the runway is littered with groups of stocks that go in and out of style." says Cramer, "Unfortunately for us, this is now recession season, so the competition to dethrone America's Top Earnings Model has never been greater."

Does that mean everything goes out of style in a bear market?

Tonight's Mad Money presented "The Cramerican Marine Field Guide to Recessions", which is what Cramer thinks this bear market is all about, an oil induced recession.

Cramer tells what works in the Wall Street fashion show, what gets the big money guys to turn their heads and say, “ah, I want to own that right now,” or "I want to dump that right now", for the exact situation we’re facing.

Here's how to play the recession game according to Jim:

  • The next time we have a trading rally, you need to use it to take profits and reposition yourself into defensive, recession stocks and raise some cash.
  • Own the stocks, the secular growth stocks, that can raise prices and thus increase earnings year over year. These are the companies that still have consistent growth, rain or shine, recession or no recession. They're also immune to the craziness in oil and grains.

So what group does Jim recommend based on this criteria to go into fashion on Wall Street?

Cramer says to look to the medical stocks with a particular emphasis on biotech just like during the last financial crisis, where biotech was the group to own.

Jim thinks what's different this time is that everybody who’s looking to play defense now really has nowhere else to turn but medical because the other traditional defensive plays are facing higher costs, and unless they can put those cost increases through, will see lower earnings.

Healthcare stocks are troubled by nothing right now according to Cramer with biotech the fastest growing, sexiest and most fashionable part of the group.

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

Cramer's New Book