Between Wednesday, December 6, 2006 and Friday, December 8, 2006, Octillion Corp. (OCTL) suffered a massive correction as a result of short selling. In the months prior to the correction, OTCL moved from just under a dollar to over 3.70. Then, my experience tells me naked short sellers began shorting the company's shares. As the stock dropped 12%, others followed suit in order to protect their profits.

The correction would have actually been negative if OCTL reported it had suffered a major setback. However, after having contacted the company, a director assured me nothing negative had happened. In fact, during the correction, OCTL reported good news regarding the company. They reassured investors they still planned to accomplish the goals they set for 2006.

Harmel S. Rayat, director of Octillion Corp., stated in a press release December 11, 2006, that "there is no corporate reason of which the company is aware that would account for the recent price fluctuations in our stock, other than volatility caused market forces." He adds, "Our shareholders should know that the development of our technologies is moving along as planned and as previously announced."

What happened to OCTL is not unusual and in no way is it a reflection of the company's forward progress. In fact, many of the successful companies I sponsored in the past followed the same pattern and all were a result of short selling. In 1996, I bought Silver Standard at 1.50. After climbing a few dollars, it suffered a massive correction. However, I reassured my subscribers that as long as there was nothing fundamentally wrong with the company itself, the stock would bounce back. Today, Silver Standard is priced at roughly 25.00 per share.

In 1997, I bought Ultra Petroleum at 2.00. Again, after the stock gained a few dollars, those who sold short took profits. Meaning, buying back stock to cover, which often gives a balance that sets the stock on an upward trajectory once again. Today, the company's stock is worth 53.00 (after a 2 for split). Talk Radio is another prime example. I bought it at 1.01 per share; it gained a few dollars, and then was shorted. Shortly thereafter, the stock soared to 15.00 per share.

Finally, and my favorite, is True Religion. I promoted this stock in 2003. It began trading 0.40 per share; however, I recommended it at 0.80. The stock climbed to 3.70, then suffered a major correction just like OCTL. Many of my readers who were invested in True Religion at the time were angry and looking for a quick way out. Again, I reassured them that this was all part of the game and that if they ride out the correction they would be pleased with the long-term results. Several months later, True Religion soared; finally peaking around 25.00. The price hovered around 25.00 for approximately one year, then fell to around 15.00 and has been in that range ever since.

Short selling and profit taking usually runs its course at some point. Once the price of the stock becomes cheap, investors will begin to buy, thus, putting the stock back on track. Let me reassure any new investors, those who are inexperienced with the ways of the stock market, that this is all part of the game. Furthermore, that this short selling phenomenon happens so often it has been coined the "baptism of fire."

Happy Holidays and a Prosperous New Year,
Kenneth Coleman