Jim (cont'd):     

Fortune Brands is early cycle, because so much of what it makes goes into housing...

40% of its operating income comes from its home and hardware segment... You Have to remember that the market discounts things six months in advance... so, since we know that housing will bottom June 30th, that makes right now the ideal time to pull the trigger on Fortune Brands...

You want to buy housing and housing related stocks as the economy approaches the bottom, and it looks like a recovery will eventually be upon us... Now that gasoline prices have nosedived, the government is actually doing what it can to push mortgage rates down, and we have an incoming president who actually knows what he is doing, and is saying all the right things, I feel confident that it is time to start buying the early cycle plays, in anticipation of a recovery that will start some time in the middle of next year... and Fortune Brands... is one of them...

I say, if the shoe fits, buy it...

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If you wait too much longer, that accidental high yield will disappear. Remember, yields get big when stocks go down. As this stock gets bought by all the mutual funds and hedge funds who are going to copy this show...

I always thought that Fortune Brands had a meager dividend compared to what it could have... but again, thanks to the big declines, puny has become large... and this stock - which has absolutely no business sporting a big juicy dividend - has become a high yielder.

The great thing about Fortune Brands, though, is that it's not a pure early cycle play... it's got a big liquor business, which we like... at least for now... it's got the cabinets and faucets business... That makes it kind of a failsafe...

Let's say that I'm wrong about a turn coming... and the recovery is a lot further off than I expect... Fortune Brands still has its defenses liquor component... so there's still a decent thesis for owning it... which isn't just the ability to drown yourself in sorrow...

That glorious, accidental high yield should protect you... whether right or wrong... no matter what, that dividend remains terrific...

Fortune Brands has always been a consistent company... a great new CEO... Bruce Carbonari... he recently replaced Cramer-fave, Norm Wesley...

The company beat the Street's earnings estimates by three cents when it reported its third quarter back on October 24... but they slashed full-year guidance, therefore taking the expectations down... another sign that the time is right to get onboard with these early cycle plays...

They are under promising now and totally over delivering...

Fortune Brands is an early cycle name that will totally help you sleep at night... not because you're half passed out by the Jim Beam... but because it's got yield support... and that dividend is relatively safe... I call it Marathon Man safe...

Fortune Brands upped its 5% July... upped its numbers... and companies really don't raise their dividend if they think there's any chance at all that they'll have to cut it in the near future... so, even while business wasn't that good, they raised their dividend because they're confident. That's a great way to keep your credibility... to raise the dividend in tough times...

Fortune Brands has actually increased its dividend every year for the last 12 years... The company ended the last quarter with $176 million in cash on the balance sheet, too untapped revolving credit facilities for another $2.4 billion in liquidity. It's not strapped for cash... I think it can make it through until the recovery, no problem...

Here's the bottom line...

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The Bottom Line!:     In Fortune Brands (FO), we've got a quintessentially early cycle play, with a backup liquor business, and an accidental high yield... With the housing bottom coming, I think on June 30th, now is the time to pull the charter on this one, and others like it.

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