Yikes!

From their peaks earlier this year, markets dropped 17% before regaining some of that lost ground. Volatility is rampant. People are panicking. Investors are dumping what they can.

How much worse can it get? Plenty.

Where can you hide?

At a time like this, it's tough. Many governments are broke. And those that aren't are paying you diddly squat in interest. The 10-year Swiss government bond yields less than 1%.

But here comes Andrew Garthwaite, strategist at investment bank Credit Suisse First Boston, with six intriguing ideas.

Or, to be more accurate, one idea with six recommendations.

Find a broker and trade stocks now

His call? Look for the stocks that are even better than government bonds!

In a topsy-turvy market that's breaking most of the old rules, this is the kind of smart thinking that gets my attention.

Garthwaite and his team have screened the market for select names that meet four tough criteria.

First, they have to be big companies. It's no use trying to find safety in smaller and midsized companies in this market. Smaller company stocks are expensive in relative terms anyway. And smaller companies get hosed in an economic slump. Their stocks get pounded, and they find it hard to borrow money.

Second, they have to be financially strong. CSFB analysts looked for companies with government-like credit. In particular, they screened for companies where default insurance on the bonds, as measured by credit default swaps, is actually cheaper than it is for sovereign governments.

Third, they screened for companies whose dividend yield is actually higher than the yield on government bonds. Investors need reliable sources of income, now more than usual.

Fourth, and finally, they screened for companies with multinational income sources. The wider you cast your net, the less vulnerable you are. Companies doing business all over the world are likely in a better situation than those heavily exposed to fewer markets.

That's the theory. The result? Garthwaite and his team came up with six solid stocks:

 
Safe and safer
CompanySectorDividend yieldForward P/E
Novartis (NVS, news)Pharmaceuticals4.3%9.6
British American Tobacco (BTI, news)Cigarettes4.6%12.2
Intel (INTC, news)Computer chips3.8%9.2
Vodafone Group (VOD, news)Wireless services5.7%8.5
Coca-Cola (KO, news)Beverages2.7%13
Microsoft (MSFT, news)Software3.1%8.2