Ah, the debate over whether we've officially entered a recession. The traditional definition of a recession requires that we must experience two consecutive quarters of decline in real gross domestic product, but the National Bureau of Economic Research (NBER) uses a more flexible definition that describes a recession as "a significant decline in economic activity spread across the economy."

Under this definition, the last U.S. recession began in March 2001 and ended that same November. But NBER didn't make a final determination of the November 2001 trough until July 2003 -- 20 months later! By that time, the Dow Jones Industrial Average had already hit its lowest point and had been recovering for 10 months.

Bottom line: Investors can't wait for economists to make up their minds.

How long do recessions last?
According to NBER, the last two recessions (July 1990-March 1991 and March-November 2001) stretched eight months from the peak of the business cycle to the trough. Previous to that, we had a 16-month stretch during 1981-1982.

The average peak-to-trough for the past 10 cycles since the end of World War II is 10 months. If that pattern holds true this time, I predict tht we could see the trough in business activity as early as the second or third quarter this year, given that GDP fell to 0.6% in the fourth quarter of 2007. That's down from 4.9% in the third quarter! Yet economists are still unsure whether we've actually hit the point of recession.

How is 2007-2008 different from 2001?
The 2001 recession was marked by a downturn in business investment and industrial production, which we haven't yet seen. And although employment trends are not looking robust right now, they aren't nearly as ominous as they were at this time in 2001. 

One big difference between now and 2001 is that the Federal Reserve took precautions by cutting the Fed funds rate last September, well before we were deep into a downturn. I think this might bode well for economic growth later in 2008.

3 stocks that were winners last time
Of course, no two recessions are alike -- and the past does not always repeat itself. But it can be instructive to identify stocks that performed well during the last recession. Many of the characteristics of these companies are likely to stand them in good stead this time.

While small-cap companies can offer much more lucrative returns in bull markets, they can collapse during bear markets and are much more vulnerable to recessions than larger, more stable companies are. Thus, my selection here focuses on large-cap prospects.

Let's look, then, at three large-cap stocks that beat the 2001 recession.

Consumer-products companies like Procter & Gamble (NYSE: PG) are generally safe bets during economic downturns. Because people will continue to shave, wash their clothes, and feed their pets under any circumstances, P&G will put in a predictable performance. However, some other consumer-products companies, such as Kraft (NYSE: KFT), Sara Lee (NYSE: SLE), and Dean Foods (NYSE: DF), have tumbled recently on commodity cost troubles.

During 2001, P&G hit its low point of $30 in April, just one month after real GDP began to decline. By November 2001, the stock was close to $39, on its way to a seven-year run into the upper $60s, where it sits now.

Archer Daniels Midland (NYSE: ADM) has come a long way from the sleepy, slow-growth agricultural-processing firm it was in 2001. Now the company is pursuing a three-pronged strategy to (1) become the "global leader in bio-energy" (alternative fuels such as ethanol), (2) expand its position in agricultural processing through cutting-edge R&D efforts, and (3) pioneer production of essential basic products such as plastic and propylene glycol (used in hundreds of products from toothpaste to antifreeze) from renewable sources instead of petroleum.

Despite impressive sales and earnings growth the past several years, the stock continues to fly under the radar, trading at a price-to-earnings multiple in the low teens. Fellow Fool Toby Shute recently picked ADM as his Best Stock for 2008.

Johnson & Johnson (NYSE: JNJ) is another stock that took a hit before the 2001 recession but then seemed unfazed by the economic downturn. From March through November 2001 the Dow fell 4%, while JNJ advanced 20%.

And it's not as if JNJ had a banner year for new pharmaceutical introductions in 2001. Go back and read its 2001 annual report. The key passages in the letter to shareholders stress consistency and endurance.

This company was Brian Orelli's candidate for Best Stock for 2008. Although the stock has had its ups and downs the past year, because of the slumping market for stents, large-cap pharmaceutical companies have a track record of outperforming the general market during recessions. In 2001, as a group, they beat the S&P 500 in total return by nearly 10%.

No stock is completely safe when fear and loathing grip the financial markets. But companies that have demonstrated recession resilience in the past, and are solidly positioned today, appear to be worthwhile investments to consider during a time like this.

Related Foolishness:

Johnson & Johnson and Kraft are Income Investor picks. For more high dividend yielding recommendations, try the service free for 30 days.

Fool contributor Timothy M. Otte surveys the retail scene from Dallas. He welcomes comments on his articles and doesn't own shares of any of the companies mentioned in this article. The Fool has a disclosure policy.