I have been long KMP (pipelines limited partnership) as well as KMI. I think you will find the energy sector will probably be very stable over the next year in my opinion. With uncertainty in Iran and high oil prices, it's hard right now to make an all out case against oil. The question is, what prices have you bought in at? Last year the energy sector saw a sell off from about Sept. through Dec.. Now I have noticed that there has been a scramble to get back into the energy sector since the oil price has failed to drift lower, back to the mid 50 level like so many had predicted. Heck, even Boone Pickens stated he saw oil going lower since there was plenty of supply post Katrina. Well, oil still hasn't gone lower and demand looks like it isn't going to wane any time soon. So, if you can convince me you see oil going back to the 45 level, I'd become bearish (even though most oil companies would still be undervalued at those levels). In fact, the more the argument for a stronger economy, the more bullish I become on oil since China will only need more to produce the goods our expanding economy would demand. Now, if you see an economic slow down (last GDP report saying something?), that could dampen demand, but most other stocks will probably suffer more in that environment.
Geopolitical risk has come back into play (Iran), and we're only 4 months away from the start of hurricane season (God, I hope a much more silent one this year!). When the President is detailing America's "addiction" to oil, it's hard to get too bearish until a solid alternative action plan is detailed. I'm still waiting for that to happen, and I'll continue to hold my oil and energy positions until I'm convinced that talk is turning to action.
Just my .02
