Big Oil Has Become Too Hard

This column was originally published on RealMoney on March 6 at 11:50 a.m. EST. It's being republished as a bonus for TheStreet.com readers.

At what point do people just say, "Owning oil's too hard?"

I believe that point is rapidly approaching. Despite my affinity for the group, it's just playing too much havoc with performance.

I thought of that this weekend when I recognized that almost none of the stocks that Investor's Business Daily focuses on in its 100 list is still oil. The momentum is gone, courtesy of the endless backing and filling. The incredible decline in natural gas has made people feel that the whole run has been an aberration. Which is too bad, because that's just untrue. But fighting it has been way too hard.

Here's what I would do going forward: Pick one driller, pick one oil and trade around them. I am picking Occidental(OXY Quote) and Halliburton(HAL Quote) for Action Alerts PLUS. I also like Amerada Hess(AHC Quote), Schlumberger(SLB Quote) and Transocean(RIG Quote) as well as Ultra Petroleum(UPL Quote). I would make sure you have a little on the sheets of these at all times and buy them on days like today.

But the big oil thesis has become too hard, and to not recognize it is to court underperformance against both the Dow and the S&P 500 for the foreseeable future.

Which we know in this game is the only future.

Random musings: Are you ready, radio listeners? I'm on the air one hour earlier, 1-2 p.m. EST, starting today. Be sure to tune in at the right time -- and to call me at my new number, 1-800-743-4443.

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