Valuation and P/E's

[benjamen]

hendi_alex's thoughts give rise to a few questions for me:

1) What sectors/types of companies do well (or just less affected) in an economic contraction?
http://www.investopedia.com/articles/sto...ession.asp
Discount stores, tobacco and alcohol, healthcare and utilities?

2) What sectors/types of companies do well (or just less affected) in an environment of rising interest rates?
http://dividendgrowthforum.com/showthread.php?tid=852
Banks and insurance companies?

3) When everything appears over valued, why not build up a cash reserve to take advantage of future better deals? As a percentage of your total portfolio, what is your personal max for cash on hand?