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No last call for Brown-Forman

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One advantage that today’s beleaguered investors have over their counterparts in the early 1930s: They can legally buy a drink or three to drown their sorrows.

That, at least, could be one of the reasons behind the surprisingly strong quarterly results reported today by Brown-Forman Corp., the Louisville, Ky.-based maker of Jack Daniels whiskey, Finlandia vodka and other hard spirits.

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“We had a nice quarter,” CEO Paul Varga told Bloomberg Radio concerning his company’s fiscal second quarter, which ended Oct. 31.

Investors, sobered by this morning’s stunningly bad unemployment report from the Labor Department, nonetheless found time to buy a few rounds of Brown-Forman. With less than 90 minutes left in the trading day, the shares were up $3.22, or 7.3%, to $47.10.

Brown-Forman’s net income rose 11% to $143.2 million, or 94 cents a share, beating the Wall Street consensus of 92 cents. Sales also rose more than expected, climbing 4.6% to $934.7 million.

Significantly, in commenting on the company’s first-half results, Varga noted that performance actually strengthened in the August-to-October quarter, a period when the the nation’s economic condition was worsening and the stock market went in the tank.

The S&P 500 index closed Thursday 46% below its all-time high of October 2007. While that’s a far cry from the 84% drop the index suffered between September 1929 and June 1932, it’s still enough to drive at least some investors to drink.

Of course, that option wasn’t available to the earlier generation of bear victims -- at least legally. Prohibition, which banned the sale of alcoholic beverages in the United States, wasn’t repealed until December 1933. President Franklin D. Roosevelt, upon signing the legislation that paved the way for repeal, probably spoke for many of his countrymen when he commented:

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“I think this would be a good time for a beer.”

-- Martin Zimmerman

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