Industry Group Updates This month, you will notice that we have upgraded our industry group database to match the current state of the Dow Jones Industry Groups. This has increased the number of industry groups that we analyze with our AI models from 85 to 100. Historically, Dow Jones has revised their industry groups about once every five years or so and after they are finished with their changes, we follow their lead and upgrade our models to match. Here is a brief synopsis of the changes. The industry groups that are brand new are: Platinum & Precious Metals Business Training & Employment Financial Administration Industrial Suppliers Tires Travel & Tourism Multiutilities Insurance Brokers Reinsurance Also, some of the old industry groups were split into two new industries: "Diversified Financial" was split into "Consumer Finance" and "Specialty Finance" "Transportation Equipment" was split into "Commercial Vehicles" and "Transportation Services" "Aerospace & Defense" was split into "Aerospace" and "Defense" "Real Estate" was split into "Real Estate Holding & Development" and "Real Estate Investment Trusts" "Distillers & Brewers" was split into "Distillers & Vintners" and "Brewers" "Recreational Products & Services" was split into "Recreational Products" and "Recreational Services" "Securities Brokers" became "Asset Managers" and "Investment Services" Some industry groups had a name change only: "Advanced Medical Devices" became "Medical Equipment" "Pollution Control" became "Waste & Disposal Services" "Wireless Telecomm" became "Mobile Telecomm" "Industrial Services" became "Business Support Services" "Casinos" became "Gambling" "Air Freight" became "Delivery Services" "Cosmetics" became "Personal Products" "Advanced Industrial Equipment" became "Electronic Equipment" "Advertising" became "Media Agencies" "Factory Equipment" became "Industrial Machinery" In one case, two old industries were merged into one new industry: "Entertainment" and "Broadcasting" became "Entertainment and Broadcasting" A complete listing of the 100 new industry groups with cross-referencing to the related Fidelity Select Mutual Funds is shown on the "Funds / Industry" web page. To go there, click here. Stock / Industry Group Updates As is to be expected with this many changes to the industry group database, many stocks have been reclassified to a new industry group. So, if you can't find a stock in the industry group that it was in last month, go to the "Stock Forecasts" link at the top of this page and enter the stock symbol to find out what industry group it has been allocated to.

Performance Statistics   Comparative Performance Since 1/10/92 Growth of $10,000 Total % Return S&P 500 $32,275 222.8% AI Fidelity Fund Portfolio $82,451 724.5% AI Stock Portfolio $126,458 1164.6%         Time Frame Comparisons 1 Month Total Return 1 Year Total Return 5 Year Total Return 10 Year Total Return S&P 500 +4.2% +13.2% +28.1% +92.9% AI Fidelity Fund Portfolio +2.7% +9.2% +59.2% +269.6% AI Stock Portfolio +1.1% +7.2% +100.9% +335.0%   If you haven't been keeping an eye on our AI Performance page, please take a look at it. We update it each month with the latest statistics.   Our Model Portfolios This month our model portfolios experienced a much higher rate of turnover than is typical. The AI Fidelity Fund Portfolio traded 4 of its 10 positions and the AI Stock Portfolio traded 8 of its 20 positions. At first glance one might think that this was due to all of the upgrades to the stock industry group database. However, upon close inspection, it is clear that the cause of the high turnover rate is the fact that our AI models are making a massive change in their predictions for inflation over the next year. Almost all of the industries and stocks that are being sold are in the energy, basic materials, and precious metals categories. There appears to be a massive tidal change occurring in the model's predictions for the next 12 months. It could be the first indication that the economy will slow dramatically and head for a recession. We will need to watch this carefully over the next few months to get a feeling for where the models are going with this change of trend.  Michael Henry - editor