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AlphaProfit Newsletter: Repositioning Schedule and March Indicator Update
March 2, 2009

Dear Valued Subscriber,

The Core and Focus model portfolios will be repositioned for the evolving market environment after the markets close on Tuesday, March 31. To help you closely track the model portfolios, we will publish the Repositioning Alert by 12:00 p.m. Central Time on March 31 in the Subscriber Login area. We will notify you via e-mail when the Repositioning Alert is published on the web site.

Prior to repositioning the model portfolios, we are not making any changes to the sector and industry recommendations or the model portfolios. 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

February was another painful month for investors long the market. Broad U. S. equity benchmarks declined double-digits. The S&P 500's month-end 735.09 close is the lowest since December 1996 and the index is now more than 50% lower from its all time high set in October 2007.

A series of plans announced by the Obama administration to 'fix' the economy did not evoke a positive response. The single largest disappointment was the lack of specifics in Treasury Secretary Geithner's plan to remedy the banking system. Announcements of the Economic Stimulus Plan and the Homeowner Affordability & Stability Plan fell by the wayside.

Downgrading the AlphaProfit Sector Portfolio Indicator to 'Wait'

While the headlines are rife with negatives, there are a few key positives worth noting.

•  The corporate bond market has improved markedly from the uncharacteristic tightness seen in 2008's fourth quarter with corporations raising nearly $225 billion in debt in 2009.

•  The U. S. government's efforts to prop up the economy have caused money supply to soar at a 16.5% annual rate, auguring well for the stock market should risk appetite increase.

•  The conference board's index of leading economic indicators has now risen for two straight months.

Developments from stress tests conducted in the Capital Assistance Program to evaluate the capital adequacy of large banks are likely to be a key factor affecting equity prices in March.

Meanwhile, the S&P 500 sits nearly 4% below its 2000-2003 bear market lows. While the rewards from buying low can be large and quick if the market turns, we prefer to err on the side of caution before the turn actually occurs. We downgrade the AlphaProfit Sector Portfolio Indicator to 'Wait' before repositioning the model portfolios. Subscribers with positions in the current investment recommendations can maintain their holdings. New subscribers can defer committing capital until the model portfolios are repositioned. We encourage subscribers to maintain adequate cash reserves and have appropriate diversification in their overall portfolio.

Recommendation Change

We are replacing Alliance Data Systems with Fiserv in AlphaProfit's basket of IT Consulting & Services companies recommended for ETF investors. Alliance Data relies on the securitization market to finance credit card receivables. Deterioration in the asset-backed credit market can render refinancing of receivables difficult. This coupled with Alliance's heavy debt burden exposes its shares to material downside risk. Fiserv in contrast provides mission critical software to the financial services industry and expects to grow EPS by nearly 11% in 2009. With a relatively recession-resistant business model, Fiserv shares offer some stability in this volatile stock market.

Going forward, the AlphaProfit IT Consulting & Services basket will be equally weighted in Affiliated Computer Services, Automatic Data Processing, Fiserv, and MasterCard. Fidelity Select IT Services continues to remain a preferred vehicle for playing the IT Consulting & Services investment thesis.

Model Portfolio Performance

Model portfolio returns as of February 28, 2009 are as follows:

  ^* YTD refers to the December 31, 2008 to February 28, 2009 period.

Stock recommendations will be included in the March 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.

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