"Coal is My Worst Nightmare"

Have you ever tried to push a lawnmower through some grass that was about two weeks overdue for a cutting? It's possible to do it - it's just a lot of work. The same yard is much easier to mow when the grass is kept relatively low to begin with. 

You're probably wondering what that's got to do with anything we could possibly care about. Here's what - too many companies out there are struggling to mow through the thick grass. Life is much easier when the grass isn't too tall. 

Well, not that China Energy Recovery (OTCBB: CGYV) was trying to mow ridiculously high grass here in the United States, but as far as opportunities are concerned, their grass just got a whole lot shorter - compliments of the Federal Government. 

President-Elect Obama recently named Steven Chu as his Secretary of Energy. Maybe you've heard of Chu, or maybe not. Either way though, if you're a CGYV owner then you should be very excited ... Chu is the poster-child for energy efficiency and the reduction of energy consumption.

This could be the beginning of something big for China Energy Recovery. 
 

No Ambiguity

Never let it be said Steven Chu isn't an authority on the matter. The guy won a Nobel Prize in 1997 for work he did with atoms and lasers (stuff that's way over my head). Since then, he's been the director of the Lawrence Berkeley National Laboratory, which is basically the center of the universe when it comes to biofuel and solar energy research. Try a Google search for his name, and the magnitude of his energy-efficiency expertise becomes clear.

Point being, he's plenty qualified. That's not even the exciting part for us though.

As investors, our enthusiasm is rooted in Chu's blunt and frequent support of alternative energy development, and the desire for more efficiency from our current infrastructure. Translation: He wants to get the world off of destructive energy sources and onto renewable energy sources. In his own words...

"If I were emperor of the world, I would put the pedal to the floor on energy efficiency and conservation for the next decade." 

Remember the title of today's newsletter? "Coal is My Worst Nightmare"? Yeah, well, that's not me saying it... it was something Chu said in an interview earlier this year. What he's talking about is the use of coal to create electricity; it's his worst nightmare because it's messy, and toxic.

Now think about what China Energy does. They make boilers specifically designed to reduce the amount of coal consumed, as well as reduce the amount of pollutants put into the environment by coal's use.

You don't have to connect too many dots to come to an obvious conclusion - if Chu has anything to say about it, coal's not going to remain his biggest nightmare any longer than it has to. A company like China Energy can solve his problem in a hurry. 
 

Impact & Timeframe

I don't want to overstate the immediate impact here. Dr. Chu isn't going to call China Energy Recovery tomorrow and order a few thousand waste-heat boilers. In fact, his role as the Secretary of Energy is considerably focused on the safe handling of nuclear weapons and nuclear waste. 

Nevertheless, the office oversees energy production and regulation, so he will clearly have an impact on the way the nation creates and delivers energy.

Factoring in the multitude of things he's said about the development of alternative energy and the dire need for cleaner energy production, I think it's a safe bet his attitudes will effectively become policy under Obama's administration. This will essentially pre-mow the grass for all legitimate alternative-energy companies, but I think for China Energy in particular... given Chu's distaste for coal. The only thing CER will need to do is just give the lawnmower a nudge. 

Longer-term - as in over the next four years, at least - I truly think this is outstanding news for China Energy Recovery. The energy/pollution paradigm shift in China that led to the company's substantial growth over the last three years is now on the verge of happening here in the United States. I don't think it would be unreasonable to assume their potential market just doubled.

So why not wait and see how policy changes affect the stock? You know how this works... the market doesn't wait for things to become obvious. The right environment is on the way under Chu's (and Obama's) leadership, which means the time to step into a CGYV position is now, before the herd goes on a buying stampede.

I still don't know when the stampede will be. But, when the market finally puts two and two together as we did above, I think the stampede could be quite big - too big to jump into once it's started. 
 

Don't Forget

Remember, Voyant International's (OTCBB: VOYT) quarterly conference call is today (Dec. 17th). The call will begin at 11:00 a.m. PST (2:00 p.m. EST). 

To monitor the call in listen-only mode from the U.S. or Canada, please dial 800-533-7619 five to ten minutes prior to start time for registration. International callers should dial 785-830-1923. The event passcode is 9403082. 

If you were in on the call last time, you'll already know it was actually a pretty interesting review. All too often these calls are just for publicity purposes or an advertisement for the company. Voyant's call was actually useful, as we learned some things that weren't necessarily publicized anywhere else.