ASX Today, page-26623

Fwiw imo this unfortunate price volatility is simply part of the games that are played on markets:

• I mentioned in a previous post that if there is a slight reduction in lithium price it will be used by those with a vested interest to call a reversal, and I was inevitable that it would happen. We need not be too concerned if we are long term investors. Today I said to family members that in 2019 a company with one of the best management track records in Australia, Wesfarmers, acted on its own foresight about the EV revolution and plunged headlong into a huge capital commitment to not only take over Kidman Resources, but to knowingly commit well over $1bn more of its capital to development of the mine and infrastructure (Lithium Hydroxide Plant) for 50% of a tier 1 lithium opportunity. They did this when lithium prices and the outlook was materially inferior to where it is today. What does that tell us about where we sit? We are laughing, with the asset and opportunity ahead of us!

• Just over 12 months ago, a number of large institutions with teams of researchers, decided to subscribe for nearly $500m of new capital in our company at $1.65 per share. They did not have doubts about the outlook and the value of the opportunity that was in front of them. Yet we sit here today having reached a year closer to the holy grail of production and the price is less! It doesn't make much sense. But that's the craziness of markets with their dishonest players and also simply the fundamentals of supply and demand. The scare tactics have worked, insofar as prospective buyers believe they might get the assets cheaper if they wait, so the price sinks and the vested interests pile in with their market nous etc. to keep downward pressure on. We don't have to doubt ourselves because we are not invested in a speculative stock or industry.

• I am invested in two other companies where undervaluation has occurred but now been reversed. Sandfire Resources was rated a "sell" by none other than Goldman Sachs when it was trading up at $7+ (target price they said was $3.30). The war in Ukraine and the Chinese COVID situation put pressure on copper and it sank over about 6 months to, you guessed it, $3.30. I doubled down in the $3's and perhaps luckily the copper price picked up and Sandfire even did a capital raising at $4.30 a couple of months ago. Now it's trading around $5.50ish....The other stock(s) are Warrego Energy and Strike Energy that languished despite their possessing very worthwhile gas reserves. Low and behold there started a lowball takeover offer and suddenly several bidders emerged and the WGO stock went from $0.13 to $0.32 in a matter of weeks. Fortunately, my patience has paid off, but to me it's about knowing what we have and believing in the underlying asset values.

I have continued to buy more LTR through this and if it goes much lower I'll be selling some stocks to take advantage of this weakness. This is not advice but simply my musings and observations.

Regards

DF