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AlphaProfit Newsletter: November Indicator Update
November 1, 2007

Dear Valued Subscriber,

The AlphaProfit model portfolio returns as of November 1, 2007 are as follows:

  ^* 2HTD refers to the June 30, 2007 to October 31, 2007 period.
  ^** YTD refers to the December 31, 2006 to October 31, 2007 period.

Third quarter earnings reports and expectation of a Halloween treat from the Federal Reserve were among the key factors charting the course of equity prices in October. While earnings reports in the aggregate exceeded analysts’ expectations, there were divergences across sectors. Earnings from the technology sector were notably strong while those from the financial sector reflected the strain caused by a weak housing market. The Federal Reserve did not disappoint and lowered its benchmark short-term interest rate by 0.25% on October 31.

Both AlphaProfit model portfolios outperformed the Dow Jones Wilshire 5000's 2.1% gain for the month. For the second month in a row, all four of the industry-group funds included in the model portfolios out-performed the DJW 5000 benchmark. Fidelity Select Software & Computer Services (FSCSX) and Fidelity Select Gold (FSAGX) led the way gaining 14.4% and 12.1%, respectively while Fidelity Select Materials (FSDPX) gained 3.8%.

Strong earnings from the likes of Microsoft and Google were instrumental in driving returns in the software group. Microsoft shares rallied to a six-year high and Google shares cut through the $700 a share mark. Gold rallied to a 27-year high against the backdrop of a surge in the price of oil and a faltering U. S. dollar. Gold flirted with the $800 an ounce level as oil spiked to a new record reaching $94.53 a barrel.

Even though earnings from most companies in the materials sector were on target, share prices here failed to gain substantial traction. Chemical company shares were restrained by the rise in price of oil. Investors also reacted negatively to 3M's comment that the company is lowering prices on LCD screen films used in TVs.

Removing Automotive Group's 'Favored Buy' Rating

The U. S. automakers have made considerable progress in their contract negotiations. General Motors and Chrysler LLC have reached agreement on their new contracts with the United Auto Workers. Both car manufacturers will fund a union-administered health care trust that will allow the companies to cap retiree health care costs. Ford is in negotiations with the UAW. Stock prices of domestic automakers have moved up in recent months as investors have reacted favorably to contract negotiations.

Strong third quarter earnings reports from auto part companies like BorgWarner have enabled such shares to rally as well. While favorable third quarter earnings reports from GM and Ford due in November can add to gains in auto company shares, we now view the automotive group to be as attractive as other groups represented in the model portfolios.

We are removing the automotive group's 'Favored Buy' rating. Fidelity Select Automotive (FSAVX) gained 6.8% in October. From the time the ‘Favored Buy’ rating was initiated on August 31, this fund gained 13.1% through October 31. The DJW 5000 index gained 5.8% during the same period.

Maintaining AlphaProfit Sector Portfolio Indicator at 'Buy'

The November-December part of the year usually represents a strong period for the market. Our enthusiasm this time around is somewhat tempered.

Equity prices have seen relatively strong gains since September. Home prices in most major metropolitan areas continue to trend lower and pose a risk to consumer spending. Additional interest rate cuts from the Federal Reserve may also not be readily forthcoming.

We believe the market will likely work itself higher in a ragged fashion 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.

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.

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