Inertia Analysis in Portfolio Management

You make money by doing as little as possible,

in terms of ownership and change of ownership stakes.

But imagine now you are a portfolio manager.

You come home from work on Monday, and your husband asks you, hey, how was it today?

What did you do? I did nothing.

Okay, and next day, Tuesday, it's like, hi darling, you know, what did you do today?

But nothing. And the same thing on Wednesday, Thursday, Friday, and it's just

like at the end of the week, hey, did you do anything? No, I didn't do a thing.

It's not intuitive that that's

easy, right? So very often the most difficult thing is not to do anything.

And so one way to look at it is what I call the inertia analysis.

You take the portfolio from January, Jan 1,

And you see, what would I be in the investment

result if I just stuck to that and not made a single change?

And then you look at your actual results for the year. And so often

you actually have detracted from your performance by the things you've done.