AlphaProfit Sector Investors' Newsletter: February Indicator Update

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AlphaProfit Newsletter: February Indicator Update
February 1, 2007

Dear Valued Subscriber,

The AlphaProfit™ model portfolio returns as of January 31, 2007 are as follows:

	Jan. 2007	1H2007*	1 Year	3 Year	Sep. 2003 Inception
AlphaProfit Focus™ Model Portfolio	3.0%	3.0%	6.4%	68.0%	119.0%
AlphaProfit Core™ Model Portfolio	1.9%	1.9%	12.6%	42.6%	76.6%
DJ Wilshire 5000® Total Market Index	2.0%	2.0%	14.1%	38.5%	59.1%

^* Dec. 31, 2006 to Jan. 31, 2007

The Dow Jones Wilshire 5000 index has been on a winning streak since August of 2006. The 2.0% gain in January extended this series of monthly gains to six. Small-caps fared better than large-caps in January.

The January rally was supported by solid if not spectacular earnings reports. The price of oil finished the month about 7% lower than where it started after being down nearly 17% on an intra-month basis. Economic indicators for the most part helped squelch fears of recession. Telecommunication and auto stocks were leaders while energy stocks lagged.

All three of the AlphaProfit Focus model portfolio inclusions Fidelity Select Computers (FDCPX), Fidelity Select Paper & Forest Products (FSPFX), and Fidelity Select Software & Computer Services (FSCSX) fared well and outperformed the DJW 5000.

Earnings from computer hardware and software companies were generally better than forecasts. While Microsoft launched the consumer version of Windows Vista operating system, Apple made vibes with its iPhone. Sun Microsystems and Yahoo showed signs of turning around. Temple-Inland joined Weyerhaeuser in the list of forest product companies coming under pressure to enhance shareholder value.

The two other model portfolio inclusions Fidelity Select Gold (FSAGX) and Fidelity Spartan 500 Index Fund (FSMKX) lagged the DJW 5000 benchmark. The performance of Fidelity Select Gold was likely impacted by negative news from Newcrest Mining even though gold gained over $15 per ounce. The Spartan 500 Index fund serves to track the large-cap Standard & Poor's 500 index. The lack of exposure to small-cap stocks caused this fund to lag the DJW 5000 model portfolio benchmark.

Downgrading the AlphaProfit Sector Portfolio Indicator to 'Buy on Dips'.

Looking ahead, the equity market appears to be pricing a perfect scenario of accelerating economic growth and low inflation. The time-table for a possible reduction in short-term interest rates appears to be getting pushed farther.

Potential risks appear to outweigh rewards in the near-term. We downgrade the AlphaProfit Sector Portfolio Indicator from Buy to 'Buy on Dips'. Subscribers getting started in tracking the AlphaProfit model portfolios or adding capital to their investment accounts may want to buy into weakness rather than chase strength.

The funds included in the model portfolios are equally attractive at the present time. As such none of the funds gains a Favored Buy rating. The model portfolio compositions are available in the Subscriber Login area of the web site.

We welcome your comments.

Best regards,
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 investment advice. Before buying any mutual fund, read its prospectus carefully. 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 affiliated with nor receives any compensation from Fidelity Investments. 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.