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How the WTC Tragedy Will Affect the Action Alert Portfolio

I wish I didn't have to write about pedestrian things like money. But we own stocks, and stocks are going to trade tomorrow, so I can't pretend that I don't have a portfolio and I can't pretend that it doesn't matter. I will review each position in my Action Alert portfolio in light of the previous week's terrible events, and suggest what could happen when trading resumes.

The Market
History Shows Panic Selling or Buying Is Not a Good Strategy
Gary B. Smith: Looking to the Past for Guidance
The Argument Against Gloom
Facing a Market Transformed by Terror
Cramer: Euro Markets Don't Tell the Whole Story
The Economy
Tony Dwyer: Triumph Over Tragedy Is the American Way
Tragedy -- and Retaliation -- to Strongly Affect Energy Sector
Sector Watch
Investors Will Be Seeking Safety, but Not All Will Desert Biotech
Software Firms Likely Will Forget the Third Quarter, Look to Fourth
Consumer Uncertainty Weighs on Wireless Sector After a Week of Warnings
Defense Stocks Aren't the Sure Bets You Might Expect

Alcoa (AA): Cash flow uninterrupted by event. No material impact other than additional GDP slowdown. Alcoa does have sizable business related to aircraft production that could theoretically be hurt by damaged airline financials.

Amerisource Bergen (ABC): No impact on drug wholesaling. This one could benefit from the flight to safety.

AOL Time Warner (AOL): Probably lost millions in ad revenue this week. That it maintained reliability throughout crisis might be theoretically beneficial, but numbers must come down.

Best Buy (BBY): Retail feels tremendous negative drag after events like this. Not a good short-term stock.

Caterpillar (CAT): GDP-slowdown fears will weigh on this stock. Rebuilding issue will not be a short-term spur.

Cisco (CSCO): It announced a buyback, but since this stock is huge, we don't know how much impact that buyback will have. Possible rebuild spur, and re-analysis of back-up systems, a la Y2K, could help orders, but don't think it will be long-lasting. Still, a better stock than it was last week.

Citigroup (C): No damage from attack. But this is a consumer-confidence play to some degree so it is somewhat worrisome. Needs rate cut.

Constellation Energy (CEG): Unaffected by last week's events. Good value play.

EMC (EMC): Storage play that could be benefit from the realization that back-up systems aren't good enough. Will benefit short-term.

Fluor (FLR): Long-term construction projects are unaffected by last week's events.

Ford (F): Consumer-confidence sag hurts comeback chances. Expect imminent dividend cut.

General Electric (GE): Big blue-chips might be seen as safer harbor than before. This company needs to step up its buyback. Numbers now more suspect, though.

Guidant (GDT): Will benefit from a flight to safety.

Halliburton (HAL): Energy stocks might catch a bid because of potential turmoil in the Mideast. Could conceivably benefit, short-term.

IBM (IBM): I want to buy this stock on any weakness, because I think companies will turn to IBM for help in remote disaster-proofing. This is my primary buy-on-weakness pick. Big cash flow, big buyback.

International Paper (IP): No impact.

Kohl's (KSS): Retail is not a place to be right now. This stock has come down a great deal. In low 40s, I will probably begin to buy again.

Merck (MRK): May benefit from a flight to safety and buybacks. Will also benefit from a weakened dollar.

Merrill Lynch (MER): Another round of number cuts ahead because of missed business. Merrill will step up disaster planning and IT spending.

Microsoft (MSFT): Could announce a stepped-up buyback plan, but otherwise there is no real impact.

Morgan Stanley (MWD): Loss of revenue triggers another round of earnings-estimate cuts.

Pepsico (PEP): Will benefit from a flight to safety. Will receive a higher price-to-earnings ratio.

Pfizer (PFE): Had just reiterated forecast. Will benefit from a flight to safety and a weakened dollar.

Philip Morris (MO): Will benefit from a flight to safety and a weakened dollar. .

Qwest (Q): Just lowered forecast, not expected to lower again. I am upset with this stock because the management has not been forthcoming; it chose to deny criticisms that later turned out to be, in part, true.

Schlumberger (SLB): Will be a short-term beneficiary of higher oil prices and knee-jerk Mideast reaction.

Goldman Sachs (GS): Too low to sell now, but this stock's numbers are too high.

TRW (TRW): Defense business is good, auto business is bad. Dividend cut taken in stride.

UnitedHealth (UNH): UNH raised numbers the day of the crash. Will be re-recommended by people next week.

Universal Health Realty (UHT): Safety name with good yield, looking to buy more this week.

Verizon (VZ): Will benefit from a flight to safety. Short-term earnings hit, longer-term shows far better reliability than AT&T during crisis with wireless. Looking to buy more.

James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for the network of TSC sites and serves as an adviser to the company's CEO. Nonstaff contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. At the time of publication, Cramer was long all of the stocks in the Action Alert portfolio. While he cannot provide investment advice or recommendations, he invites you to send comments on his column to jjcletters@thestreet.com.

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