Burned by Clean Coal Technologies stock
Burned by Clean Coal Technologies stock

By Malcolm Berko Comments 0
Published: July 6, 2008

Dear Mr. Berko: You wrote a column on Clean Coal Technologies last January when it was trading at $23. I'm a chemical engineer and I know something about the technology so I bought 300 shares for $7,000. Within several weeks the stock ran up to $58 so I sold my stock and more than doubled my money. I thank you for that tip. However, several days later the stock was trading in the mid-$60s. I thought I made a mistake so I re-bought 300 shares at $68. The stock ran up to $75 and crashed down to $1.60 several months later. What did I miss? Where did I go wrong? Please advise me because I still own the stock.

Multimedia

S.P., Aurora, Ill.

Dear S.P.: While Clean Coal Technologies Inc. (CCTC-$2.12) was trading in the $70s, the company announced a 5-for-1 split, so your 300 shares became 1,500; on an adjusted basis, the $75 a share price now translates to $15 a share.

In that January column I said that CCTC was a "gross speculation.” And I'll remind you once again that not only is it a gross speculation, it's a gross-gross speculation, which is a gross squared.

You must also recognize that the speculative fervor in CCTC was 95 percent unrealistic and 95 percent unwarranted. The speculators pushed CCTC to the ionosphere and also shoved it back to sea level. And you don't need to be reminded that you were a blithering idiot to rush back in after earning a sweet $7,500 gain, which has now been turned into a loss (if sold 1,500 shares today at split adjusted price of $3 a share) of $15,500.

(Didn't your daddy ever tell you, "Stop when you've made a score — only fools go back for more? But once again they've started; fools and profits are soon parted.”)

Company has ties to Oklahoma

"Green” is fast becoming the new red, white and blue, and the U.S. is responsible for 26 percent of the world's greenhouse gasses. Carbon is a nasty, insidious global pollutant and it has the same impact weather it's emitted from a sports utility vehicle or a coal-burning power plant. And Clean Coal Technologies is the only technology about which I know that can reduce 90 percent of the carbon emissions from coal and increase its BTU output more than enough to pay for the cleaning process.

CCTC has a contract with Benham Cos. of Oklahoma City. Benham is a wholly owned subsidiary of SAIC Inc. (SAI-$20.78). SAIC, home ported in San Diego, is a $9 billion revenue giant that provides scientific, engineering and technology solutions to domestic governments, foreign governments and the utility industry. Benham expects to design and build CCTC's first commercial operations in China. Construction is expected to begin in the Spring of 2009 in Datong, which is 130 miles west of Beijing.

Datong, with 3 million residents, known as the "City of Coal,” is the most polluted city in China and has the largest carbon dioxide emissions in the world. Over 80 percent of smoke and dust, 90 percent of sulfur dioxide, 83 percent of carbon monoxide and 70 percent of nitrogen oxides are caused by burning coal. This crippling pollution has caused huge economic losses and severely damaged the health of over 120 million Chinese. Pollution problems are nearing critical mass and CCTC's patented technology is one of China's few pollution solutions.

CCTC inks 5-year contract

CCTC has also signed an initial contract with Sino-Mongolian International Railroad (June) to convert 2 tons of its low-grade lignite coal to a clean-burning, low-emission, high-BTU fuel source. The sample conversion project should commence by this September/October and if successful the railroad will give CCTC a five-year contract to convert 15 million metric tons annually. The railroad owns more than 20 billion metric tons of reserves, which is a big chunk of coal.

However, since you bought the stock, a lot of corporate blood, sweat and progress have added significantly to CCTC's realistic speculative appeal. Most of the vulture speculators have exited the scene and the sane, long-term speculators seem to be building a position. So hold your CCTC and consider speculating with another 300 shares at the $2.90-$3 price. If the process is as impressive as SAIC/Benham believes it is, I'd be willing to wager 10 kilowatts of AC power against 1 British thermal unit that some of the big U.S. utilities will come knocking on CCTC's door.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, FL 33429 or e-mail him at malber@comcast.net.