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 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?
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