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[hendi_alex]

While I have moved to strongly overweight on energy, my holding are diverse, including: integrated oil, rig lease, shipping, midstream pipeline, oil services index, and nuclear. Also, my approach is diverse as the cumulative weighting of core holdings is under 20% with the other 20%+ being in transient plays, most of which include significant infusions via call sells. Further, profits were skimmed, about 10%-15% from about half of the first round buys that took place in mid December. Proceeds were redeployed later into current speculative positions. As of today, all are nicely in the green to the tune of around 15%, so there is a little cushion there. Further, much of the current play will come to an end as short calls get exercised and pull the shares away.

So while I've chosen to go long energy in a big way, I also agree with you, that as quarterly numbers come in over the first couple of quarters this year, prices of many tickers will take significant hits. I also believe that as crude recovers, there will be a prolonged period when crude stays in the $75-$85 range. That will deflate earnings of everyone in the sector.

IMO the name of the game in energy is to stay nimble. Be ready to cut losses of any speculative positions early, if they come. Keep any overweight manageable, and mostly short duration. Good names, meaning industry leaders, are good to accumulate, but very slowly, very patiently.