Why Datt Capital cut its lithium position when Chinese data stopped adding up, and rebuilt it once the supply picture could be checked again.
~ 2 min. read
By: Datt Capital
Datt Capital sold much of its lithium stake when Chinese production and inventory figures stopped matching what its team saw in the field. In August, once the facts could be checked, the firm bought back in. The lesson was about knowing when to step back, not about changing its mind on lithium.
The bet was simple: the market had missed the supply story. But in the weeks before the sale, official numbers clashed. Production figures said one thing, inventory figures another. Neither matched what Datt Capital found.
If you cannot price a stake with confidence, do not hold it in full. Datt Capital cut back rather than wait in the dark.
Selling when the numbers go wrong comes at a cost. A view can be right even if the data is a mess. Cut too soon or too much and you risk missing the rebound. Sometimes noise looks like real trouble.
So Datt Capital saw the sale as a matter of size, not a full exit. It cut back to match what the facts could support, but kept its view unchanged.
By July, the facts were clearer. Datt Capital bought back in early August. The details are in its paper, Lithium: The Supply Side Reasserts Itself, and in the August Small Companies Fund report.
Cutting back when the data broke down, then buying again once it could be checked, are not opposites. Both are the same rule: match the size of a stake to the strength of the evidence. These choices get less attention than picking stocks, but they matter just as much. The real lesson is to match your position to the facts you can trust.
To learn more about how Datt Capital manages positions when data becomes unreliable, visit our investment philosophy page or contact Daniel Liptak, Head of Distribution, on 0419 004 524 or at daniel@datt.com.au.
Disclaimer: This article does not take into account your investment objectives, particular needs or financial situation; and should not be construed as advice in any way. The author may hold stocks discussed in this article. Forward-looking statements reflect the author's views at the time of writing and are subject to change. Past performance is not indicative of future results.
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Datt Capital Pty Ltd
ABN 37 124 330 865
AFSL 542100
390 St Kilda Rd, Melbourne VIC 3004
© COPYRIGHT 2025. ALL RIGHTS RESERVED.
Datt Capital Pty Ltd
ABN 37 124 330 865
AFSL 542100
390 St Kilda Rd, Melbourne VIC 3004
© COPYRIGHT 2026. ALL RIGHTS RESERVED.
The information on this website is prepared and issued by Datt Capital Pty Ltd (ABN 37 124 330 865 AFSL 542100) (Datt Capital). Unless otherwise stated, the information is intended for wholesale clients within the meaning of section 761G or 761GA of the Corporations Act 2001 (Cth) (Corporations Act).
Datt Capital is the investment manager of the Datt Capital Absolute Return Fund (APIR FHT3309AU), the Datt Small Companies Fund Class A (APIR FHT4217AU), and the Datt Small Companies Fund Class B (APIR FHT4217AU) (together, the Funds). Fundhost Limited (ABN 69 092 517 087 AFSL 233045) (Fundhost) is the issuer and trustee of each Fund.
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