To prevent this e-mail from being delivered to your bulk mail folder, please add our 'From' e-mail address, subscriberservice@alphaprofit.com to your address book.

AlphaProfit Newsletter: August Indicator Update
August 1, 2007

Dear Valued Subscriber,

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

  ^* YTD refers to the December 31, 2006 to July 31, 2007 period.

July saw a shift in investor sentiment as enthusiasm gave way to concerns during the latter part of the month. The Dow Jones Industrial Average set new all-time highs breaking the 14,000 level for the first time. Credit availability got tighter as evident from the difficulty leading financial institutions had in arranging loans for some major transactions. Sensing M&A activity may simmer down, investors bid down share prices of companies speculated to be take-over targets.

Three of the four industry-group funds included in the AlphaProfit model portfolios outperformed the Dow Jones Wilshire 5000 benchmark in July with Fidelity Select Gold (FSAGX) gaining 5.6%. Fidelity Select Materials (FSDPX) and Fidelity Select Software & Computer Services (FSCSX) recorded returns on either side of the flat line while Fidelity Select Automotive (FSAVX) declined 6.0%.

In the automotive group, BorgWarner, Ford and General Motors came out with solid earnings reports. However, investors were worried that the transactions some auto and auto parts companies are working on may not go through due to lack of financing for private equity buyers. Concerns on the outcome of ongoing labor negotiations coupled with general weakness in the consumer discretionary sector took a toll on stock prices.

While gold mining shares did not escape the carnage during the market sell-off, strong gains recorded earlier in the month helped them show a healthy gain. Supported by a fall in the dollar and a rise in the price of oil, gold gained over $35 per ounce from its June close to trade as high as $684.80 per ounce on July 24 before pulling back.

In the materials sector, share prices sprinted early in the month on deal-related optimism. The cool-off in sentiment towards takeover plays set the stage for a correction in materials-related shares. Strong earnings reports from companies like 3M and Freeport-McMoRan Copper & Gold helped stem the damage.

Share prices in the software group held up better during the market turmoil. Strong operating performance from companies like Nintendo and Apple helped drive returns here.

The loss in the Russell 2000 small-cap proxy was more than twice that in the large-cap laden S&P 500 index. The Fidelity Spartan 500 Index fund that seeks to match the performance of the S&P 500 index fared better than the Dow Jones Wilshire 5000 model portfolio benchmark.

Maintaining the AlphaProfit Sector Portfolio Indicator at 'Buy'.

Although investors are fixated with tightening credit conditions, news quality from a corporate earnings perspective remains good. Second quarter earnings for the S&P 500 member companies are on track to exceed expectations. While the credit markets may serve bad news in the near-term, we believe equity investors committing capital at this stage are likely to profit in the period ahead. We maintain the AlphaProfit Sector Portfolio Indicator reading at 'Buy'.

Presently, we are not making any changes to the model portfolios. The model portfolio compositions as well as exchange traded fund (ETF) and mutual fund recommendations are available in the Subscriber Login area of the web site. None of the sectors or industry groups included in the model portfolios carries a Favored Buy rating.

The recent decline in the automotive group has made it a tad more attractive than the other sectors and industry groups included in the model portfolios. We remain optimistic that the domestic automakers will be able to effect changes to the labor contracts with the United Auto Workers that expire on September 14. The changes should likely help the Detroit automakers in lowering costs and in improving their competitive position. We tend to view weakness in auto shares as opportunities for venturesome investors to add to positions.

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 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.

Copyright © 2007. AlphaProfit Investments, LLC. All rights reserved.