Knife skills and investing

14 August 2020

reading time:  minutes

I've watched loads of videos about how to improve my knife skills in the kitchen.

My knife skills are better than they were when I was 20. But despite the hours of schooling about knife skills, I’m pretty mediocre. It always seemed like there were better things to do than practice my new-found (or newly-reinforced) knowledge with hours (or even minutes) of practice.

In fact, whenever I try “advanced” knife skills I’m a danger to myself. Half of my knife injuries have come from my attempts to run before I could walk.

So imagine my pleasure when I watched Adam Ragusea’s video explaining that you don’t need special knife skills!!

It turns out, knife skills are essential – if you’re a professional, and you find yourself chopping the same things over and over and over again, with significant time constraints.

If you’re a normal civilian, cutting household-quantity amounts of food, having next-level knife skills isn’t going to shave a lot of time off your meal prep.

Nor is it going to save you a lot of injuries, compared to simply paying attention and being careful, especially with round things.

I love Ragusea’s conclusion, after researching 2018 US hospital emergency department admissions involving knife incidents:

“cutting round things is one of the most dangerous things that we can do. Things that can roll. And therefore hopefully we can protect ourselves by making round things flat before we do anything else to them. Which is a standard technique of ‘knife skills’.”

Ragusea makes it very clear that he is just making a guess. But even though it’s not based on a randomised, double-blind, prospective study on the efficacy of knife skills, I’d say it’s a very good guess.

What do knife skills have to do with investing?

If you're a professional investor, it’s great to have a deep understanding of things like:

  • P/E ratios and cyclically adjusted price-to-earnings (CAPE) ratios (including what is typical for businesses in certain types of industries at different stages of their lifecycle);
  • EBITDA (earnings before interest, taxes, depreciation, and amortisation);
  • Sharpe ratios;
  • nuances relating to how accounting conventions vary from one region or industry to another;
  • the regulatory structure of teh industries in which you invest;
  • and the like.

Unless you’re being paid to invest, however, you shouldn’t need to worry about any of these things.

If you get the basics right, you’re golden.

These investment basics include making sure:

Ultimately, the value of a given share reflects the consensus view of many professionals who know and understand all of these things better than you or me. Your contribution is unlikely to add much value to your own portfolio or to the price discovery of financial markets.

For most of us, the less we focus on technicalities, the better.

Knife skills are vital – for the right people

Knife skills are vital skills for professionals.

For civilians, they’re not especially useful in terms of saving time, and stopping injuries – compared to simply being careful and paying close attention to the basics.

When I try advanced knife skills, I’m a danger to myself.

If you try advanced investing, you might end up being a danger to yourself, too.


investing, knife skills

About the author 

Sonnie Bailey

Sonnie provides financial planning services via his business, Fairhaven Wealth ( Fairhaven Wealth provides independent, advice-only, fixed-fee financial planning services. Sonnie is also a “recovering lawyer”: he has specialised in financial services, trusts, and estate planning.

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