The last thing I expected coming into Monday this week was for the markets to have a huge rally. Did anyone see this coming? The biggest increase in years.I suspected we were going to have more selling and investors panic and force big institutions to sell. These swings are proof that the market is predictably unpredictable. I assumed we were heading for at least a little fall after the steady bull though credit and housing fears did the trick. The faster and higher a bull gets the harder it falls usually. I hope this logic doesn't apply China's tremendous bull.

Fortune Brands is one of my Stocks for the Long Run that have little risk being picked up cheap and held for awhile because of their dominant competitive position coupled with high returns on equity and steady profitability.

Fortune Brands (FO) just increased their dividend by 8% to $1.68 per share. I see them making larger increases in the future as their portfolio shifts to heavier weightings in spirits and wine and a better balance overall after the spin-off of ACCO Brands Corporation (ABD). CEO Norman Wesley recently was quoted

"We create value for shareholders of Fortune Brands in many ways, including building our consumer brands, positioning our businesses for stronger growth, improving productivity and using our financial strength to pay dividends that return immediate value to shareholders,” said Norm Wesley, chairman and CEO of Fortune Brands. “We’re pleased that we’ve increased the dividend in each of the 11 years since we began trading as Fortune Brands, more than doubling our payout over that period."

They also buy back shares and the stock has proven to be recession proof during the last bear market. A lot of their revenue is tied to home furnishing so things haven't been great lately but they are diversified and when housing picks up in the years ahead the stock should do well.

Even though they grow well and better than market returns can be had with just the stock I feel the dividend is the real strength. If they can just grow the dividend at 9% a year until 2011 to $2.35 an investment today at $87 a share would give a return of just about 11% on the dividend alone. More on FO and their website.



disclosure: author is long Fortune Brands (FO)

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Welcome to a highly fueled edition of The Festival of Stocks #48! There are some great articles in this weeks Festival of Stocks. Let's get to the submissions.


Eric Schleien presents The Dark Side Of Warren Buffett posted at ValueSeeker.Net. I really enjoyed this article about Warren Buffett. It keeps perceptions of him in perspective and shows that he is human and has made mistakes among other things.


Leon Gettler presents The bear turns global posted at Sox First. The fallout from the US mortgage mess continues to hurt the US market and beyond. Clearly, issues once specific to the US are now flowing through to other markets as banks force borrowers to sell assets and investors scramble away from risk. And it will get worse.


George Courtney jr presents Despite Volatility, Stocks Are a Good Deal posted at The Authentic Bartender Blog.
Makes the case though stocks are still near all-time highs, they are nevertheless bargain-priced. Second, the credit crisis that has triggered the recent volatility really isn't all that threatening.


FMF presents Another Vote for Index Funds posted at Free Money Finance. Another reason to invest in index funds. Looks at what legendary fund manager Bill Miller has to say and makes some good common sense conclusions about index funds vs. actively managed funds.
I myself like index funds/mutual funds plus a handful of quality stocks for the competent individual investor.


Babak presents Time To Consider The Battered Financial Sector posted at Trader's Narrative. Time to scoop up cheap and beaten down shares in the financial sector (banks, brokers, insurance co's). After the recent market weakness this sector has gotten very cheap. Time to buy great companies like Goldman Sachs, Citigroup and the like at fire sale prices.


James presents Analyzing Some of the New Top 25: Shoes,Oil,and... His site that I highly recommend College Analysts. Here he looks at Steven Madden (SHOO), Valero (VLO), and New Frontier Media (NOOF), all of which he believes are solid buys given their low valuations. These are from a model that does a quantitative evaluation of about 1,500 stocks. The model generates a power ranking of stocks. The model is very useful for generating leads into some excellent and potentially under-priced businesses.


Blake Morphis presents Mad Money - Defense - ATK and RTN | Mad Money and Fast Money Recap & Fan Site posted at Mad Money and Fast Money Recap & Fan Site. Given the recent market volatility, Jim's recent recommendation on the new bull market in defense stocks.


Silicon Valley Blogger presents Shrug Off A Stock Market Slide! 7 Surefire Ways To Handle A Market Fall posted at The Digerati Life. Some good advice on how to handle these falling markets. Just a couple of the topics hit on are to not listen to the media hype and think like a contrarian. Excellent article here.


The Mad Money Analyst presents Option Premium Valuation: Time and Intrinsic Value posted at The Mad Money Analyst. A good review of how to effectively evaluate options premiums. This gives investors a clearer view of what exactly effects prices and premiums of options. Markets have lately been increasingly volatile and this will help you find those right entry points and calculate volatility profitability. Make more on your investments.


Super Saver presents 7/30/07 Stock Purchase Update - After The Carnage posted at My Wealth Builder. Some recent stocks they picked up during the market fall. This article like so many others in this weeks festival have a recurring theme that lower stock prices are sometimes a welcomed opportunity for the intelligent investor. A depressed Mr. Market can give us great opportunities sometimes in good businesses like Ben Graham said.


Steve Faber presents - Make Gains From the Chinese and Indian Markets Without Actually Investing There posted at Debt Free.


Matthew Paulson presents When You Invest at the Bottom, When Do You Sell? posted at Getting Green.


Eric Stanley presents Two Investment Mistakes posted at Personal Finance Blog Articles. Are you finding good investments for your new money? Or are you doing the right thing and also finding better investments for your OLD money?

Shadox presents SEC Fines? Double Whammy for Investors posted at Money and Such. Some SEC fines just don't make sense, since they are punishing the victims of the crime. This article is my analysis of the situation.

Personal Finance

Tim Ramsey presents How to Pay Off Credit Card Bills posted at My Debt Relief Blog. Trapped in credit card debt? You can get out of the credit card trap with my sure-fire way to pay off those pesky bills.


Eric Hudin presents My Estate Planning Career Blog » Blog Archive » Selecting a Good Trustee - Factors to Consider When Choosing a Trustee posted at My Estate Planning Career Blog. Wills and Trusts are an important financial vehicle for transferring wealth. But who should manage your trust? I'll tell you how to pick the best person.


Aaron Wakling presents Credit Cards - A Necessary Evil posted at The Credit & Credit Card Blog. Well you probabaly already know the answer to this one. I cover good uses for credit cards and bad ones. Its a good article for anyone concerned about if they should use their credit cards to make purchases.

Options and Trading

Dax Desai presents Fundamental Rule of Day Trading: Preservation of Capital posted at Dax Desai. Explains the importance of Preservation of Capital when day trading and gives examples of right/wrong ways of day trading.


Nabloid.com presents The Power of Options » Nabloid on Investing posted at Nabloid on Investing. Takes a look at the advantages of options.


Dax Desai presents Fundamental Rule of Day Trading: Preservation of Capital posted at Dax Desai. 1st in a series: Rules of Day Trading - Preserve Capital


Alvaro Fernandez presents Lifelong Learning for Top Performance posted at Brain Fitness Blog. Great advice from a trading guru.



Submit your best articles on stock market related topics for future festivals. This concludes another edition of the Festival of Stocks.
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If Murdoch's News Corp acquisition of the Wall Street Journal will compare to the acquisition and handling of Myspace then the future might not be so bright for the Wall Street Journal. Myspace seems to have fallen out of the innovating drivers seat in the competitive social networking biz.

There is a tremendous amount of spam emails that are all over Myspace and security has been a big issue. The site now has a security confirmation code to prevent bots that must be typed before one can update their own profile. One of its competitors Facebook.com recently switched its requirements from having to be at a college to allowing anyone to set up a free account. Facebook just recently rolled out custom applications to personalize ones profile and online experience to almost infinite possibilities. As far as applications go there are stock ticker, maps of where you have traveled and even quizes you can make about yourself just to name a few.

When I think about it though none of this surprises me. Newscorp is trying to do to much. Buying companies hand over fist has to be done delicately or they are at risk of becoming the next Tyco.

Be sure and come back Monday for a great edition of the Value Investing News Festival of Stocks and check out the video below of Cramer losing it on CNBC(if he wasn't faking it).

disclosure: no position in NewsCorp or Tyco.
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He was talking with Erin Burnett. About 2 minutes into the video he loses it addressing Federal Reserve Chairman Ben Bernanke.
the video
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Every now and then I check a website that screens for net current asset stocks. At the height of the recent bull I believe at times there were less than about 12 selling for less than net current assets. I don't think the screen catches everyone though. Today there are about 26 of them. Here are some of the ones I found earlier that looked the most interesting to me and could be worthy of a potential investment. Emphasis on "could".

Lazare Kaplan International Inc. (LKI)
Taitron Components Inc. (TAIT) 3% dividend yield
SigmaTron International (SGMA)
Peak International Ltd. (PEAK)
Boss Holdings Inc. (BSHI.OB)
Cadus Corp. (KDUS.OB)
Atlantic Coast Entertainment Holdings Inc. (ACEH.OB)
Ableauctions.com Inc. (AAC)

disclosure: no position in any stocks mentioned above.
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I started an investing group months ago on the social networking site Facebook. The group is called Investing. Facebook is now ahead of News Corp's Myspace in my opinion. They seem to filter spam a lot better and don't have problems with security. They also are innovating the applications. There are also a bunch more investing groups. Some of my favorites are Stock Junkies,Buffettologists and The Active Stock Market Traders of Facebook.
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