When is $2,00 Party ?, page-49

Sometimes emphasis on what portion of an individual's SMSF is made up of one holding can be misleading in regards to the risk that carries.

I have much more invested outside (Property & cash) my SMSF than inside. This wasn't by choice (due to government goal post shifting & super rules in regards to investment properties) and as it turns out, not something I'm displeased about. PLS has been an unbelievable winner for me and now dominates my SMSF holdings. Much more than 30%. As a trustee of my fund, I can easily justify the investment strategy of the fund by the capital gain obtained and also the fact that I can afford to carry higher perceived risk (minimal risk in my view, now that the landscape has changed) because of my assets outside the fund. Now I dare the ATO to question my SMSF investment strategy when I have beaten Commercial & Industry Superfund performances over a 25 year timeframe. It would be an hilarious exchange to say the least. Am I going to sell off PLS to rebalance the sector holdings or % value of PLS to total value of fund. Hell no. I cannot presently find a more compelling sector to be in with a view to the next 10 years and within this sector I cannot find another Company that I feel others a better risk/reward ratio. I will cover off on this by fund meeting minutes and an adjustment of the fund investment strategy. Proof is in the pudding.

Now many SMSF would cash in the PLS holdings, pay the capital gain of 10/15% and reinvest the cash into dividend yielding shares to pay an income stream in pension phase. I will convert the holdings to the fund members pension phase. This avoids CGT. At our age, I can then sell 4% of the pension value per year to provide the required income stream. Now this is still 2 years away. At this stage, it is a no brainer to hold for me but is reviewed obviously.

In regards to other producers ramping up quickly, I think there are enough Lithium industry analysts with extensive industry experience that have highlighted that quick ramp up of supply to meet coming demand, is just not going to happen. The only articles that state otherwise are journalists with minimal Lithium industry knowledge writing poorly researched articles. Even Roskill have done an about face.