In a recent article penned by yours truly, I made the argument that the U.S. economy is already in a recession...even if the powers that be don't want to see it. My argument was fairly simple - unemployment is up, capacity utilization is down, inflation is up, and the Fed is still pushing rates lower. Even if all of those trends were halted right now, the damage has still been done.

I want to add another layer of recession evidence today. More importantly, I want to give you a few ideas so you can defend your portfolio just in case any recession cuts deep.

Whether it's intentional or not I can't say, but some of the stocks - and groups of stocks - that have taken leadership roles are the defensive names many long-termers seek out when the economy is, shall we say 'challenged'?

Are investors forecasting a recession by picking recession-proof stocks? Could be. Consumer staples appear to be the beneficiaries of most everything else's demise. Food, tobacco, and household supplies are all now looking better than average.

But it's not just consumer goods putting the pedal to the metal...as much as they can anyway. The other traditional recession-proof sectors are perking up right on cue as well, including utilities and casinos. Yes, casinos. Anybody new to the investing game may not believe it, but old hands who've seen a couple of economic contractions will know it to be true - casinos can thrive in the worst of times. (I think we could be in the midst of a nuclear holocaust, and most of Vegas' Baccarat tables would still be full.)

Anyway, the recent and not-so-recent results of these areas appear on the nearby table. Some of the long-term numbers for these groups may not look all that great. That's a good thing though, especially in light of the recent numbers...it means they're still likely to be undervalued.

With these sectors and industries in mind, here are my 'best of' picks for each one. A complete portfolio solution? Not by a long shot, but it'll at least plant some seeds.

Consumer Staples

Since this sector tends to be the main (and sometimes only) winner during a rough patch, it may not hurt two pick two or three companies from its different industries. So, I did.

Tobacco - British American Tobacco plc (BTI) would be my pick here, though most of the major tobacco companies might be fine. BTI's chart just looks a little more consistent, and they seem to have a fairly robust international market share. The fundamentals look great... per last quarter's report, quarterly earnings are growing at 34.5%, and a 21.6% profit margin is solid. Nothing fancy.

Food - Well, it's not actually food...my pick from this category is actually Boston Beer (SAM). Their stock got destroyed in early November, but I see it as a value proposition. The fundamentals? Well, the current figures don't really tell the whole story - the numbers look terrible because they had a terrible last quarter. The rising price of hops took a big bite out of profits. Unless prices continue to skyrocket, I think they'll be able to figure out a plan B.

Side note: The rumor is, Anheuser-Busch (BUD) may be shopping for an acquisition target to help share expenses with. I've not heard that Boston Beer is on any list, but I have to wonder.

Personal Products - There are actually a lot of ways to go here...cleaning products, toiletries, or even make-up. All should do pretty well in the coming months. Since I have to pick one though, I chose USANA Health Sciences (USNA).

I'd be the first to confess the fundamentals are just mediocre. However, there's something incredibly odd - in a good way - with the company's float. There are 16.1 million shares outstanding, and 7.4 million in the float. The short interest (as of the last snapshot) is a bizarre 7.3 million shares.

The 'good' in that is the potential. For those of you who've seen and traded short interest before, you know this is a bullish powder keg...we just need a spark. The downside is, how did the short interest get this off-kilter in the first place? Maybe the sellers remain in control. However, weighing the risk and reward, I'm willing to bet with the stock rather than against it.

Utilities

This was a tough one, but I have to think UIL Holdings (UIL) is going to keep building on its recovery effort. The last couple of years were pretty erratic in terms of revenue. Though still a little shaky, at least it's shaky growth now.

Casinos

Wynn Resorts' (WYNN) chart looks better than the underlying numbers, but I don't think the most recent results tell the whole story. Even so, with a P/E of 66.0 it still seems a little over-priced. I think the Wynn name commands enough respect from the market to make for a temporary position given the environment, but I wouldn't marry this stock just yet.

Bottom Line

As always, nothing is ever guaranteed, and this doesn't necessarily mean you should be shedding anything that's not a casino, utility stock, or a consumer staple. However, with the Fed clearly desperate at this point, I still suspect we're already in a recession. If so, I'm looking for defensive companies like the ones we discussed here to be the lone bright spots for the next few months.

James Brumley does not own any of the stocks mentioned in this article.