If you combine the autogrow and autoshrink options,
you might create unnecessary overhead.
Make sure that the thresholds that trigger the grow and shrink operations
will not cause frequent up and down size changes.
For example,
you may run a transaction
that causes the transaction log to grow by 100 MB by the time it commits.
Some time after that the autoshrink starts and shrinks the transaction log by 100 MB.
Then, you run the same transaction
and it causes the transaction log to grow by 100 MB again.
In that example,
you are creating unnecessary overhead
and potentially creating fragmentation of the log file,
either of which can negatively affect performance.
Source:
http://support.microsoft.com/kb/315512
Article ID: 315512 - Considerations for the "autogrow" and "autoshrink" settings in SQL Server
Sub content: What are the performance implications?