.  .  .  .  .

JJC:    Welcome back to the Cramerican Marine Field Guide to Recessions!...  And how to make money... while the bears seem to be reigning triumphant over most, but not all, of the market...  because, as any good Cramerican knows, there is always a bull market somewhere...

I just laid out the 1990 scenario for you... That was the last time we had a financial meltdown... where I think you want healthcare stocks, especially biotech, because they're the ones that could actually make you money in this situation. Yes, as bad as it seems now for Fannie Mae (FNM), Freddie Mac (FRE), Citigroup (C), Bank of America (BAC), Lehman Brothers (LEH), Wachovia Corp. (WB)... it was bad then too...

You see, there were winners in 1990, when Citi nearly went under... in biotech... and I think they'll do it again...

And what I really thought was amazing was that it wasn't even good biotech... the second-tier biotech stocks did well too...

How about an example?... How about an example of what I think is going to work this time?...

Did you see that job on Genentech Inc. (DNA) that The New York Times printed over the weekend?... [Costly Cancer Drug Offers Hope, but Also a Dilemma, July 6, 2008]... I mean, this was just an extremely negative article... I have to tell you, it had nothing new. You see, the press loves to grandstand about drug companies overcharging for life-saving or life-extending drugs. I read the article... well-written, well-edited, and I don't think it landed a glove... not a glove on DNA... and yet the stock was down $2 bucks, or 2.6%, today...

Now, a lot of local papers wouldn't print this up... It's The New York Times for heaven's sake...

The stock's under a momentary cloud. I think it probably will be for several days, but none of that should matter if DNA could deliver good earnings and good sales of Evastin... and I am telling you, I think it can. In fact, all this negativity about how expensive its drugs are... It's a chance to get in...

That New York Times article is a chance to get in at a lower entry point than you otherwise would have been able to, given the fact that the rest of the biotech stocks held in there like champions...

The Street wants stocks that can post year-over-year gains, while the S&P should have year-over-year disappointments...

DNA should be a gainer! And, in the end, that year-over-year compare of DNA will make it look better than a lot of other stocks that will be headed down...

You know Genentech Inc. (DNA), our good buddy DNA, with the cancer wonder drug, Evastin...

Not a wonder drug because it cures cancer... although it does appear to add months to the lives of terminal cancer patients... Evastin is a wonder drug, because DNA is finding so many darn uses for the thing... as are many doctors... desperate doctors trying to find things...

It's got breast cancer, colon cancer, lung cancer... They're using it... you name it. And that's a great strategy.

Of course, DNA's also got a host of what seem to be other great drugs... Retuxin, for slowing the process of rhumetoid arthritis... There was a negative report about Retuxin today... talked about a possible side effect from Retuxin... but I think that too will soon be forgotten, just like The New York Times piece...

DNA's also got Herceptin, for advanced breast cancer treatment, and it's got what looks like a terrific pipeline... including Retuxin for Lupus, which I think passes FDA scrutiny... It could be very big.

It's got a lot of catalysts... a lot of drug trial results coming for the rest of the year, and in 2009... many of which should really boost the stock... Again, you're getting it at a New York Times discount...

Now, I'm getting into the specifics of DNA here but, to me, this move isn't about the specifics... It's about biotech... at last, coming back into style on "Project Wall Street"...

We could be talking about Amgen (AMGN), or Celgene (CELG), or Genzyme (GENZ), or Cephalon (CEPH)... and the big-money guys buying those stocks hand over fist in the last 10 days, because healthcare now looks like the safest group around... and, right now in the markets, safe is sexy...

So, remember, that's the big-picture reason... the macro reason, if you insist on having some genuine Wall Street jibberish to like the stock...

Recessions generally don't stop people from paying for, or having their insurance companies pay for, cancer drugs that will keep them alive for months longer than they normally would...

Now, just so you know... I think a close reading of Barack Obama's healthcare plan, that just came out, that specifically favored DNA, because it's trying - and this is my interpretation - to coerce the health maintenance and cost-containing insurers into maintaining coverage at low rates for companies, even though the insurers want to jack them up, after instances of severe health problems like the ones DNA would be used for.

By the way, the democrats have always been big pharma bashers... and there I'm talking about the Merck (MRK) and the Wyeth (WYE) and the GlaxoSmithKline (GSK)s... but biotech boosters. So have no fear of even a 50-state democratic sweep...

You can't put a price on adding weeks or months to a loved one... or, actually, you can... and, if you read that New York Times piece, you find out it's very high... because the prices DNA charges for these drugs are enormous...

The macro point is that stocks like this are recession-proof... but we've got plenty of micro reasons... specific reasons, that the company meets, to want DNA too...

For the last three quarters, sales of Evastin have been sluggish... and this was even after Evastin received approval for first-line treatment of advanced breast cancer... and that let the street down, despite the fact that, for the last five quarters, this company has beaten consensus earnings estimates...

Now, at last, it looks like prescription data on Evastin for this quarter are on track to exceed consensus estimates giving the Street a reason to feel good about DNA when it reports after the close in a week's time...

Then there's the legion of catalyst data from nine studies... five of them Phase III studies, the last studies you need to conduct before you get FDA approval for a certain use of a drug. They should come out between now and the end of the year. In 1990, you remember, when you had tests in front of you... when you had all these Phase III tests... even if you didn't know how they were going to work, people gravitated toward these stocks.

Now how high could DNA go?...

Since I believe we're dealing with a shift in season on the Wall Street fashion show, that means stocks like DNA should see their price-to-earnings multiples expand... That means they're going to pay more for those earnings in the future, as investors search for consistent, high growth... something there's less and less of away from biotech, okay... but that DNA should have...

I wouldn't be surprised to see this stock, at $76 bucks, go to $88... maybe even higher, if you consider the 1990 playbook I'm operating off, where biotech was the best-performing group, when those financials collapsed. And the financials now are collapsing...

Here's the bottom line...

.  .  .  .  .