The purpose of this exercise is to get a sense of what's going on in your mind. It's similar to some of the open awareness meditations I have written about in the past (https://www.wisdomblog.co/let-your-mind-wander/), the key difference is that as well as thinking about whatever is on your mind, here we also take time to take a step back and observe what we are actually thinking about.
Start by sitting comfortably, close your eyes and just observe what your mind is doing. Notice how the mind jumps quickly from thought to thought. Where is your mind now? Are you thinking about the past? The future? Or the present?
Do you feel any particular emotions as you do this? Are you in a certain mood.
One important clarification is that we are observing, not judging. If you feel tired or angry, don't label that as a bad feeling that you have to end. Just observe your thoughts and feelings.
The purpose of this meditation is to see how active the mind is. Once you really take note of this, it can really motivate you to take your meditation practice more seriously. So we can calm down this mind of ours that keeps jumping from thought to thought.
Source: A Monk's Guide to Happiness - Gelong Thubten