the 2011 debtceiling debate has been a useful if not foreboding analogue as wall street grapples with the current backandforth in washington about raising the nations borrowing limit concern about a potential us government default has only mounted in recent days contributing to backtoback weekly losses in the s  p 500 if a scenario like 2011 were to play out this year in the market it would certainly be unsettling but back then a lastminute deal was eventually reached and in many instances the debtceiling weakness in stocks proved to be a great buying opportunity for investors who were willing to step in so with history as our guide we wanted to take a closer look at how our current club holdings fared in 2011 but first a little background the s  p 500 was off to a solid first half in 2011— up about 7 into late july before being derailed by debtceiling drama the broad us stock index plummeted nearly 17 over a fewweek stretch that began in late july and bottomed in midaugust democrats and republicans ultimately reached a deal in early august however in the days after markets were rocked when standard  poors made the unprecedented decision of downgrading the united states toptier aaa credit rating the whole saga took the s  p 500 from 134502 on july 22 2011 to a closing low of 112353 on aug 19 2011 a decline of 165 to be exact but a robust 12 rally would take its place from there into yearend bringing the index to an essentially flat performance for all of 2011 by feb 7 2012 the s  p 500 closed above its latejuly peak zoom out further from the aug 19 2011 bottom through this past fridays close may 12 2023 the s  p 500 more than tripled in price thats more evidence in favor of betting on the markets over the long run no matter how bleak any one situation or pullback may seem in realtime spx mountain 20110819 s  p 500 from aug 19 2011 to present to be sure its impossible to predict exactly how the negotiations in washington will unfold in the coming days and weeks but a sense of urgency is present because treasury secretary janet yellen has said the us may run out of ways to meet its borrowing obligations as soon as june 1 president joe biden on sunday struck an optimistic tone ahead of tuesdays meeting with the top four congressional leaders republicans who control the house of representatives have demanded cuts to federal spending in order to agree on a debtlimit increase democrats who control the white house and senate have argued the us should keep paying its bills with no other stipulations attached jim cramer has urged investors to adopt a more cautious shortterm posture as the parties hash things out the club has taken up its cash position to around 10 accordingly this gives us the dry powder needed to be buyers on any future debtceilingrelated weakness in our favorite stocks if 2011 is any guide we also expect opportunities to present themselves this time around in fact the market is already close to entering oversold territory  based on the s  p 500 short range oscillator  which usually prompts us to start looking for bargains heres a table detailing how our club stocks performed during the heated 2011 debtceiling debate and how they did for the rest of the year once clear of the crisis note the information above excludes meta platforms meta and palo alto networks panw because those two club holdings were not publicly traded in 2011 meta formerly known as facebook and palo alto networks both completed their initial public offerings in 2012 additionally coterra energy ctra in 2011 was known as cabot oil  gas and traded under the ticker cog in october 2021 cabot merged with cimarex energy to form coterra and changed its stock symbol to ctra not a single club stock made it through the 2011 debtceiling drama unscathed but its no surprise that the ones with the best relative performance were procter  gamble pg and johnson  johnson jnj falling only 51 and 54 respectively between july 22 and aug 19 of 2011 both companies are classic defensive plays when equity investors are worried about a catastrophic financial event such as the us government defaulting on its debt they are going to seek out the perceived safety of consumerstaple and healthcare firms like p  g and j  j a similar rationale seems to explain why tjx companies tjx had the thirdbest relative performance falling only 59 during the 2011 debtceiling jitters the offprice retailer is viewed by many as a defensive stock because consumers squeezed by a slowing economy or even a recession may increasingly seek out the bargains found at tj maxx marshalls and home goods tjx had a great rest of the year too gaining 22 from the s  p 500 indexs 2011 august bottom to yearend this time around the club certainly expects defensiveoriented stocks to hold up better than the overall market if theres no resolution soon dont make a move unless youre buying a stock that does well into a recession because thats what wall street will presume were going to go into if this battle drags on jim said last week many of the worstperforming club stocks during the 2011 debt fight are the kinds of companies that typically are hurt by a slowing economy such as oilfield services provider halliburton hal and financial morgan stanley ms those stocks each lost a third of their value between july 22 and aug 19 of 2011 pioneer natural resources pxd another energy stock and industrials such as honeywell hon and caterpillar cat were also among the biggest laggards in that period similar to the outperformance seen with p  g j  j and tjx its not exactly surprising to see investors dump energy banks and industrial stocks when financial uncertainty reigned supreme one major exception in 2011 coterra energy then known as cabot oil  gas actually held up ok despite the default fears and had a solid 14 rally from the august bottom into yearend even when macro concerns dominate sentiment companyspecific factors can matter too and in 2011 a lot went right for cabot in fact the companys stock was the topperformer in the s  p 500 in 2011  doulding in price big picture the 2011 data shows why jim has stressed that the latest debtceiling squabble may be a chance to buy despite extreme carnage during the julytoaugust stretch most club holdings rallied into yearend 19 of the 31 stocks or about twothirds of them whats more 12 club stocks finished 2011 higher than their july 22 close the s  p 500s latejuly peak that year five of those companies foot locker fl alphabet googl starbucks sbux estee lauder el and linde lin— all saw doubledigit percentage declines during the markets julytoaugust swoon a sign investors saw opportunities to buy the dip the bottom line is that shortterm problems for the market arent reasons to completely run away into all cash for patient investors who can look further out on the horizon these pullbacks open the door to build out bigger positions in great companies see here for a full list of the stocks in jim cramers charitable trust portfolio as a subscriber to the cnbc investing club with jim cramer you will receive a trade alert before jim makes a trade jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trusts portfolio if jim has talked about a stock on cnbc tv he waits 72 hours after issuing the trade alert before executing the trade the above investing club information is subject to our terms and conditions and privacy policy  together with our disclaimer  no fiduciary obligation or duty exists or is created by virtue of your receipt of any information provided in connection with the investing club no specific outcome or profit is guaranteed