A question perplexing portfolio managers in this business cycle is to shield their portfolios against a bearish phase. In other words, to include a stock that is negatively correlated to the markets. General observations we can make of an ailing economy is weak consumer confidence coupled with low investment plans by corporates. There are certain businesses which are well equipped to work against the order of such a psyche.

One company which has often been quoted as an economy by itself and is positioned well to cater to this phase of the business cycle is most certainly Wal-Mart (NYSE: WMT). Its business strategy of sourcing its material from the third world countries which offer a huge cost advantage and secondly, their product lines are the ones which a middle income group needs to keep their families functioning. The company’s sales numbers released on Sep 4 confirms the positive move which indicated a growth of 10.4% as compared to the same quarter last year. Also to be noted is that the company’s international segment growth which moved up by 16.9% as compared to last year’s numbers. The company is certainly gearing up its international presence by entering into a joint venture with an Indian company to enter the world’s biggest middle-class population. All of these factors certainly seem to be adding shine to its coat and have the ability to beat the bear market. The stock has seen an increase of 21.5% while the economy witnessed a negative return of 4.7% on the S&P500 in the past six months.

Wal-Mart Stores are currently rated as "A" by iStockAnalyst computerized scan.

Adding to the woes of a meltdown in the financial markets which has spread on to the housing markets has meant growth for debt recovery agents over the past months. Portfolio Recovery Associates, Inc (NASDAQ: PRAA) is a good example for the point in time. The company’s service includes purchase, collection and management of portfolios of defaulted consumer receivables. They purchase defaulted debts of all types which include credit cards, installment loans, auto deficiencies, healthcare, utility, retail and telecommunications. Buying up ailing debt portfolios at huge discounts means that efforts in recovering a minor portion pays off the debt. For example, in the fourth quarter, PRAA purchased debts with a face value of $3.7 billion for just $103.8 million — just 2.8 cents per dollar of debt purchased. With the markets showing no signs of a respite very soon, it is expected that a lot more such portfolios would be up for grabs, thanks to all the structured products and financially engineered products which flourished the markets in the past few years. The stock has shown a growth of 12.4% in the last six months against the negative return of 4.7% on the S&P500 in the past six months.

Portfolio Recovery Associated is currently rated as "B+" by iStockAnalyst.com computerized scan.

Disclosure: The author does not own any stocks mentioned in this article.