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AlphaProfit Newsletter: April Indicator Update
and Repositioning Changes
April 1, 2008
Dear Valued Subscriber,
The Core and Focus model portfolios were repositioned after the markets closed on March 31. The current 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.
Market Developments
March brought back credit market-related worries that plagued most of January as the financial sector served discouraging news. The uncertainty
in valuing financial firms reached monumental proportions when JP Morgan offered just $2 per share or $236 million to buy an ailing Bear Stearns
and thereafter increased the offer five-fold to $10 per share.
The Federal Reserve continued to take measures to restore stability in financial markets. The central bank initiated a program to lend Treasuries
in exchange for mortgage-backed securities and other distressed debt. The Federal Reserve also lowered its benchmark short-term interest rate by
75 basis points on March 18.
Repositioning Changes
The U. S. economy either is already in recession or is muddling along at near-recessionary levels. The steps taken by the Federal Reserve have put
pressure on the U. S. dollar. This in turn has pushed commodity prices higher. Inflation is palpable at gas pumps and supermarkets. In the near-term,
a stagflation scenario is not out of the realm of possibilities.
To better weather a wider range of possible economic outcomes, we recommend adding oil & gas exploration and production investments while cutting
back on medical equipment and software. At an industry level, we believe oil producers and, to a greater extent, natural gas producers will benefit
from a combination of rising production and relatively robust commodity prices. Energy service firms, particularly those serving gas producers,
will prosper from rising capital spending. Our preferred mutual fund and exchange-traded fund selections reflect this thesis.
Rating the AlphaProfit Sector Portfolio Indicator 'Buy'.
Following repositioning, we rate the AlphaProfit Sector Portfolio Indicator
'Buy'. During the next several months, we believe the U. S. economy will likely benefit from the measures taken by the Federal Reserve in shoring up
credit market liquidity and providing monetary stimulus. This in turn can enable equity prices to recover.
In the near-term however, there are risks. The first quarter earnings-reporting season will start in earnest in about 10 days. It is conceivable that
analysts will have to lower their second quarter and 2008 earnings estimates following guidance from corporations. As such, we encourage subscribers to
maintain adequate cash reserves in their overall portfolio.
Model Portfolio Performance
Model portfolio returns as of March 31, 2008 are as follows:
| Mar. 2008 | YTD* | 1 Year | 3 Year | 4 Year | Sep. 2003 Inception | |
| AlphaProfit Focus™ Model Portfolio | -1.1% | -10.8% | -7.8% | 39.0% | 54.2% | 100.6% |
| AlphaProfit Core™ Model Portfolio | -1.0% | -11.5% | -4.3% | 35.5% | 37.6% | 67.6% |
| DJ Wilshire 5000 Total Market Index | -0.8% | -9.6% | -5.8% | 20.6% | 29.3% | 49.1% |
* YTD refers to the December 31, 2007 to March 31, 2008 period.
The investment thesis and risks for oil & gas exploration and production and factors driving performance of other sectors and industry groups
will be discussed in the April Report due for publication on the 12th.
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 © 2008. AlphaProfit Investments, LLC. All rights reserved.