“The only way you get a real education in the market is to invest cash, track your trade and study your mistakes.” ~ Jesse Livermore
Lessons from Legends: Why Post Analysis Matters for Investors
The Value of Learning from the Past
What do Tom Brady, Ted Williams, and Jesse Livermore have in common? They extensively studied their past to excel in their fields. Tom Brady, through deep knowledge of football strategy, led the New England Patriots to seven Super Bowl victories. While he wasn’t noted for unique physical skills, his dedication to preparation set him apart. Similarly, Ted Williams achieved a rare .400 batting average by meticulously analyzing his performance. Williams even authored a book, “The Science of Hitting,” to share his insights.
Like these sports icons, Jesse Livermore stands out as a titan in investing due to his commitment to self-analysis. Instead of merely chasing hot stocks, Livermore prioritized studying his own decisions and the market trends. One memorable tactic included locking himself in a bank vault over a weekend each December to scrutinize every trade he made during the year. Livermore’s dedication is mirrored by my own experiences with legendary investor William O’Neil, where I too learned the importance of thorough post-analysis.
Here are five steps to conduct a post-analysis:
1. Record Your Top and Bottom Trades of 2024
Start by navigating to the “Gain/Loss” section of your brokerage account. Sort your trades by “$ Gain” and “$ Loss,” then list your ten best and worst trades from 2024.
2. Analyze Your Trades
On your trading charts, mark where you bought and sold each stock. Provide a context for your trades, drawing from technical, fundamental, industry, or market analysis. For example, one of my best trades from 2024 saw a 257% gain in MicroStrategy (MSTR) within two months.
Image Source: TradingView
3. Evaluate Industry Performance
Conduct an analysis of the leading and lagging industries from the past year. Noteworthy 2024 performers included sectors like crypto, quantum computing, artificial intelligence, and commercial airlines. Meanwhile, clean energy, steel, and biotech showed weaker performance.
Image Source: Christian Fromhertz
4. Identify Missed Opportunities
Sort your trading universe by 2024 performance to identify top-performing stocks. Recognize that trends often continue longer than expected. Monitoring previous high performers can lead you to the stocks that may double in value. This year’s standout stocks in the S&P 500 Index included Palantir (PLTR), Vistra (VST), Nvidia (NVDA), and United Airlines (UAL).
Image Source: Zacks Investment Research
5. Start a Trader Journal for the Future
If you didn’t maintain a trading journal in 2024, commit to doing one in the new year. A trading journal doesn’t need to be complicated. Simply document your buy and sell points along with the rationale behind each trade. Software like Microsoft Excel can facilitate this. Focus on consistency rather than complexity.
Final Thoughts
While post-analysis may seem tedious, it is essential for investors at any level. Just as athletes review their performances to refine their skills, investors need to analyze their trades. Dedicate some time in January to compile your 2024 analysis—it will be a valuable investment in your future.
Explore Zacks’ Latest Top Stock Picks for 2024
Don’t miss your chance to get in on our top 10 stock picks for 2025. Expertly chosen by Zacks Director of Research Sheraz Mian, this group of stocks has shown outstanding success. Since its launch in 2012, the Zacks Top 10 Stocks has gained +2,112.6%, significantly outperforming the S&P 500’s +475.6%. Sheraz has scoured 4,400 companies covered by the Zacks Rank to find the best 10 stocks for long-term investment in 2025. Be among the first to discover these promising new stocks.
See the New Top 10 Stocks >>
Want to stay updated with the latest recommendations from Zacks Investment Research? Download the report on 5 Stocks Set to Double for free.
United Airlines Holdings Inc (UAL) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
MicroStrategy Incorporated (MSTR) : Free Stock Analysis Report
Vistra Corp. (VST) : Free Stock Analysis Report
Palantir Technologies Inc. (PLTR) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
