Why Is U.S. Steel A Jumping Jack?

Why Is U.S. Steel A Jumping Jack?

A steelworker in Pennsylvania. Photo credit: MICHAEL MATHES/AFP via Getty Images.



AFP via Getty Images

Past March, U.S. Steel bottomed out at $4.54, but trading now at a respectable level of $22. The stock does bounce 10% or more, intraday. A year ago, when researching $5 paper, I bought Halliburton



HAL

, Freeport-McMoRan



FCX

, Macy's



M

and General Electric



GE

. But, I turned down U.S. Steel as a prospective spec because I didn't like the steel industry. Too much overcapacity in the world, for years and years. U.S. Steel's balance sheet stood debt heavy and I projected it couldn't sustain more than a year or two of sizable operating losses.

My history in ragamuffin investing dates back to Chrysler when it was a ward of the U.S. Treasury. They called in Lee Iacocca to run the company, awarding him plenty of warrants to do so. The U.S. Treasury awarded itself warrants, too. A few years later, the turnaround done, Iacocca demanded the government give up its warrants but the Treasury said