AlphaProfit Sector Investors' Newsletter: November 21, 2007 Bulletin

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AlphaProfit Newsletter: November 21, 2007 Bulletin

Subject: Staying the Course in a Tough Market

Dear Valued Subscriber,

November has been a difficult month for investors. The U. S. stock market has turned lower since the start of the month with the Dow Jones Wilshire 5000 index losing over 7%.

Fears of a slowdown in consumer spending and the possibility of a resulting recession have caused stock prices to decline. Selling from investors recognizing losses in a bid to reduce capital gains tax has exacerbated the decline. The Federal Reserve has not been forthcoming with comments on the future course of interest rates.

Most sectors and industry groups have lost ground with stock prices in consumer discretionary, financial, and technology sectors being hit hard. Even gold, often a safe-haven in troubled times, has not been spared.

We believe equity prices will likely continue to remain weak in the near-term unless the Federal Reserve surprises investors with an interest rate cut. Upcoming economic and employment data will play a key role in determining the course of equity prices ahead of the Federal Reserve's interest rate setting Open Market Committee meeting on December 11. Equity prices can stabilize if the Federal Reserve reduces its benchmark short-term interest rate.

The sectors and industry groups represented in the model portfolios have underperformed the DJW 5000 benchmark in November. Among these selections, the auto group has suffered the most. Even though auto parts companies are performing well and Ford outperformed analysts' earnings forecast, disappointing earnings from General Motors and concerns over its exposure to the mortgage market through GMAC's Residential Capital division have weighed on share price performance.

Given the recent decline, valuation metrics for the recommended sectors and industry groups are attractive. News flow from most companies in the recommended sectors and industry groups is favorable. While absolute returns are hard to predict, we believe all of the groups included in the model portfolios have the potential to fare better than the market in the period ahead. Accordingly, we are leaving the composition of the model portfolios unchanged at this time. We particularly like the prospects for gold and software. Venturesome investors may add to positions in these groups.

The next Indicator Update will be published on Monday, December 3.

Sincerely,
Sam Subramanian
AlphaProfit Investments, LLC
Ideas. Insights. Results.
http://www.alphaprofit.com

Notes: The AlphaProfit Sector Investors' Newsletter™ is for information purposes only. AlphaProfit Investments, LLC is not soliciting any subscriber to buy or sell any security. Nothing herein should be construed as an offer to buy or sell securities or to give individual advice on investing. Before buying or selling any mutual fund, exchange-traded fund, security, or investment, read the prospectus carefully. For securities held in brokerage accounts, read the broker's specific terms and conditions which apply to trading of the securities. AlphaProfit Investments, LLC cannot and does not give any assurance that the present or future model portfolio changes will be profitable. Past performance is not a guarantee for future results. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind. AlphaProfit Investments, LLC is not responsible for any errors or omissions. AlphaProfit Investments, LLC neither is associated with nor receives any compensation from any of the mutual fund companies, brokers, or entities connected with the exchange-traded funds mentioned in the newsletter. Please review our Terms and Conditions of Use and Subscriber Agreement which is available on our website at www.alphaprofit.com; they govern your relationship with AlphaProfit Investments, LLC, including, but not by way of limitation, use of this newsletter. No part of the AlphaProfit Information may be reproduced or re-transmitted in any manner without written permission of AlphaProfit Investments, LLC.