POSCO May Be in a "Heads I Win, Tails You Lose" Spot

(Full disclosure: POSCO (PKX) is a name I have owned as a long-term investment inside the VIP arm of Market Chess Subscription Services since 2015)

Owning PKX, the massive South Korea steel maker, the last few years has indeed been an interesting journey, as plenty of steels and global materials miners were all but written off as byproducts of the massive deflationary fallout from the 2008 financial crisis and aftershocks. 

Nonetheless, POSCO's dip under its 2008 prior crash lows proved to be short-lived, setting up my long-term value thesis in early-2016 with a monstrous rally alongside virtually all miners into the summer of 2016. 

Since then, the tone and tenor of the price action has been more of a grind, in effect wearing us out rather than scaring us out. 

But for those of us still in POSCO, it may be in a win/win situation, meaning even if tensions do rise with North Korea or other parts of Asia, on top fo the Middle East, it is hard to see the steel maker suffering much from the war drums. In fact, it should benefit immensely. 

And if a deal is reached with North Korea where tensions quiet down, the looming threat of higher rates and inflation ought to benefit PKX, too. In fact, it is likely true that the main threat to PKX and most global miners would be to see another inflationary head-fake followed by deflationary crash, not unlike how 2008 played out.

As to the point about Trump and tariffs, PKX has not flinched much beyond its recent pullback. And now the stock is threatening to emerge back above $80.  

At the moment, though, PKX is flagging nicely on its monthly chart, below, with the 2016 in the rear-view mirror and $100 eventually the destination to further the thesis of a new bull run underway for the materials/commodity complex. 

Next earnings are not scheduled until late-May.