Don’t just do something, sit there!

 

I love that purposefully juxtaposed Yogi Berra-ism.

I have been thinking about nothing on this lovely Friday morning. More precisely, why doing nothing — or at least much less — is better for your long term investing outcomes than doing something, also known as more.

Don’t.

Don’t do something, anything, just for the sake of it. If you are going to do something, you better have a damned good reason for it.

Doing something feels good. Doing something creates the illusion of control. Doing something responds to the angst we feel when we are unhappy with current circumstances.

Doing something is why people dump all of their stock at market bottoms; please-just-make-the-pain-stop-sell it-I-don’t-care-if-this-is-the-low was heard quite often in February and March 2009.

I have been thinking about nothing recently, mostly in the context of time frames (a post I did a few weeks ago, expanded into a full column for Sunday).

Humans exist in the here and now, at the intersection of past and future. The present is all they really know from experience. Contextualizing the long game is not their forte. What 24/7 media fills their minds with is so much meaningless detritus, so many useless options — its why they often forget that nothing itself is a viable choice. Indeed, nothing is often the best choice available.

Nothing is the enemy of the financial industry. Doing nothing does not generate any business. You cannot sell a front load mutual fund, an annuity, or any sort of private placement when people do nothing.

Nothing generates no fees, commissions, costs or taxes.

Nothing doen’t pay the rent. Nothing is the costly opponent of salespeople everywhere. They have come up with all manner of clever phrases to taint the art of doing nothing. “Paralysis by Analysis” is my favorite example.

The investment industry hates nothing. Just about everything the financial sector does or says or markets or advertises is designed to get you to do something — anything! And right now, too: Track your portfolio tick by tick! Get instant updates the second news breaks! Free trading for ETFs! Real time alerts!

E) None of the above.

When confronted with a problem, many people feel obligated to do something, anything — even the wrong thing.

Well, at least you tried” they say, when what they really meant was “You did not think this through or fully consider the options and outcomes to your decision making. You failed.

Even Pop culture references this, obliquely. Yoda was philosophical about nothing as an option: “Do. Or do not. There is no try.” Hence, Star Wars recognized that nothing was a viable option.

No, not Seinfeld — it was never a show, as so many people have mischaracterized it,  about nothing. It was actually a show about the minutia of life.

Nothing is underrated.

Sometimes, nothing is better than something.

 

What are you doing when you should be doing nothing?

Category: Apprenticed Investor, Investing, Philosophy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

23 Responses to “The Fine Art of Doing Nothing”

  1. gms777 says:

    “It’s the nothing that makes us something. It’s what we miss that hits the mark.”

    Old 7UP slogan.

    For more, “Zen in the Art of Archery” by Eugen Herrigel

  2. BennyProfane says:

    Yeah, but, that kind of thinking made me miss the last rally from ’09. Not really pissed, did a lot of something to avoid the crash, but, still………..

  3. dina says:

    Think diagnostically before doing something
    http://www.youtube.com/watch?v=0_AFr2usIU8

  4. PeterR says:

    .
    .
    .
    .
    .

    [no thing]

    .
    .
    .
    .
    .

    Ah?

  5. Gnov says:

    “Theres nothing I hate more than nothing
    Nothing keeps me up at night
    I toss and turn over nothing,
    Nothing can cause a great big fight”

    Eddie Brickell

    http://www.youtube.com/watch?v=lVhpntvpcnQ

  6. vincentvito says:

    “try” only makes sense if you have a clear intention in mind and follow the direction to the end

  7. Years ago, when I was a retail broker, the concept of “doing nothing” was “bad for business.” But in many cases (not always) it was a good decision.

  8. Bruman says:

    Wasn’t that a Ronald Reagan quote to Congress about the recession? He was advocating riding it out and said “Don’t just do something… sit there!”

    (No political statement here, just remembering the quote).

  9. Boffin says:

    “Patience is a virtue”… doing nothing can often be the best receipe for success.

  10. akane6612 says:

    Love the post and what I think you’re getting at, but i’m a bit confused. Why does this make sense in investing but not government? I feel like far too often we have government (both parties), and/or the fed trying to do something/anything to make things better. As opposed to letting the markets clear. Taking the associated pain, and rebuilding in a more structurally sound way.

  11. phillips49 says:

    I agree with the concept of doing nothing and the external and internal drivers in us to do ”something”. However one must not under estimate the amount of work it takes to do “nothing” well. Doing “nothing” must be an active, well informed decision, that requires doing “something” well. It requires staying on top of your game, knowing the score and inning. As Kenny Rogers sang “ya gotta know when to hold’em, know when to fold’em, know when to walk away and know when to run”. The key word is knowing. We make good, bad and neutral decisions. Figuring out which is which takes both time and work. It’s necessary to “know” when a loser is a loser and why and when a winner is a winner and why.

  12. jbay says:

    I too am antsy to do something when what I really need to do is nothing. So many somethings will be happening soon in my life that I really feel like I should be doing everything. When in fact the best of all possible things I can do at this moment in time is nothing. So instead of pulling the trigger on Deere, putting my house up for sale to make a move, I stop myself and remind myself. I already have a position in Deere. Even if it goes up it will probably come down; even if it goes down it will probably go up. It’s better to wait to put my house for sale until I’ve moved. Just wait, be patient, do nothing until the right time to do something.

    Regards!

  13. faulkner says:

    You hit the nail on the head – if only people could see it. That is one of the problems with nothing. It’s hard to see … and hence to value. “What did you do in the _______ daddy?” “Nothing.” “Oh.”

    Seeing nothing as viable option is a higher, and more experienced, level of thinking. Like the “marshmallow test” for tenaciousness – get one now or wait until later and get two – most people are much better off distancing or distracting themselves from the mallow, or mentally discounting it or replacing it than trying not to think about it at all. Which, curiously enough, is what they do when they procrastinate about something.

  14. marvo19067 says:

    CR: Pooh, what’s your favorite thing in the whol world?
    WTP: My favorite thing is me coming to visit you, and then you ask, “How about a small smackeral of honey?”
    CR: I like that, too. But what Iike most of all is just doing nothing.
    WTP: How do you do just nothing?
    CR: Well, when grown-ups ask, “What are you going to do?” and you say, “Nothing” and the you go and do it.
    WTP: I like that. Let’s do it all the time.
    CR: You know something, Pooh? I’m not going to do just nothing anymore.
    WTP: You mean never again?
    CR: Well, not so much.

  15. dwkunkel says:

    We need to occasionally take time out for reflection. It’s not exactly nothing, but it appears like that to others, It’s becoming a lost art in our culture of constant communication.

  16. VennData says:

    And leave it like that for ten years. You’ll do great. Assuming you have only a tiny allocation to bonds.

  17. Theravadin says:

    I always find doing nothing easier when it is sunny out – somehow a dreary day makes me need to feel like I’m making progress, fighting against the entropy, and all that. Humans are funny.

  18. [...] Ritholtz, “Nothing is the enemy of the financial industry.”  (Big Picture earlier Abnormal [...]

  19. robwiss says:

    Can’t believe you forgot the best quote about nothing:

    “Sometimes nothin’ can be a real cool hand.”

    http://www.youtube.com/watch?v=xVXKOb5EE7Y

  20. MDenny says:

    I don’t know if doing nothing in and of itself is a good thing, I think its doing nothing when your emotions are calling for you to do something that is when the real value is unlocked.

  21. Larry says:

    It is very tempting to do something when you haven’t got evidence of a good value or a good deal. Tempting to speculate when you are not very good at it, and don’t have much of a clue. Better to reflect and be honest with yourself. Form a plan, allocate and stand pat. Then do nothing.