SINGLE STOCKS - PLAYING WITH CYCLES In my last Portfolio Movers publication, I have mentioned the case of an agricultural stock that has been lagging the rest of my portfolio with a slightly negative performance (-6%). What few noticed, however, is that (dividend reinvested) this stock has historically performed in line with its country's index ($EWZ ), as the stock-to-EWZ ratio shows below. However, one would have noticed that the stock tends to follow mid-term cycles investors can exploit to generate excess returns, overweighting the stock whenever the ratio reach -1σ below trend, and underweighting it when +1σ has been reached. Nothing complicated here, no emotions involved, just the application of basic principles everyone can follow.