FORMER HEALTH INSPECTOR: Restaurant letter grades don’t mean much
Mark Nealon is president of the SAFE Restaurants Consulting Company and a former health inspector. He tells us why the letter grades in restaurants don’t mean too much.
Following is a transcript of the video.
Mark Nealon: A restaurant goes through a cycle inspection at least once a year. On the reinspection, depending on how the restaurant performs, they’re issued to grade. A, B or C. We’re at a point now where the city inspector will actually count the number of mouse droppings that they find in a restaurant. That number is not just very arbitrary but can be the difference between life and death to your business. You can get a B grade very easily by a couple of cracked floor tiles, maybe a dusty ventilation hood, a fruit fly that was found at the bar and a thermometer maybe that wasn’t working properly. And there’s your B grade. Where an A grade restaurant could have, like I said, a couple weeks ago been closed down. The inspector can find a live rat in the kitchen and still issue an A grade. That’s a 10 point violation and it takes 13 or more points to lose your A grade. So it’s really just a snapshot in time. If you get inspected as a restaurant owner on a Friday night let’s say, when you are packed, your chances of more violations are there, as opposed to, let’s say, a restaurant across the street that gets inspected on a Tuesday afternoon when the restaurant is actually closed and cleaning up between lunch and dinner service. Yes, I would certainly eat at a restaurant that didn’t have an A in their window in a heartbeat.
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Financial analyst Gary Shilling reveals the lessons he has learned about the economy and markets, how to stay ahead, and why everybody can’t win. Following is a transcript of the video.
Gary Shilling: Well, I’ve learned a lot of lessons over the years, and most of them the hard way. But, there are a couple of basic facts.
If you look at the economy, it grows over time. Not at a steady rate, but it grows over time. And markets, particularly the stock market, reflects that. In other words, if you have the economy growing at, let’s say the nominal economy, nominal GDP growing at 4%. Long-term, corporate profits are going to grow about the same rate.
Obviously, they can’t continually expand faster than the economy or decline relative to the economy. So, that’s where you start.
So, in terms of stocks, the only real difference between how the nominal economy is going, and how the stock market is going, is price-to-earnings ratios, and they move in long cycles. 10, 15 years, they move up, then they’ll tend to move down. And that’s pretty much it.
Now, that’s the overall economy and that’s the overall investment.
Of course, everybody thinks they’re going to beat this, there’s that great gambling instinct in all of us. That’s why people watch financial news programs. That’s why they’re watching us. Everybody’s trying to get a leg up here.
Well, of course everybody can’t win at this game, I mean, on average, it’s going to average out. There is that hope that springs eternal within the human breast, as somebody once said, that you’re going to be ahead of the game.
Now, what that means is, if you are trying to beat the game, you’ve got to be against the consensus. It doesn’t mean that you simply are a contrarian in a sense of, “whatever the consensus is, I’m going to take the opposite side.” No, no. ‘Cause there’s times the consensus can be right, and often is.
But, what it means is that, when you come up with an idea, and it is counter to the consensus, and you think it’s got a good chance of happening, and it’s a trend that’s working, well, then that’s where you want to really jump on it with all force.
That’s what we did in the early 2000s. We saw as early as 2002, what looked like a developing housing bubble. And, so we said, “This isn’t ready to crack yet, but it looks like it’s getting there.”
You had people who were putting nothing down on houses, they assumed that the appreciation would be such they’d never even have to make one monthly payment, because they could refinance, you had the no-doc loans, all this nonsense.
It really was clear.
Now obviously that bubble would not have been developed and not broken ’til really the end of 2007, unless everybody, or most people, were convinced it was going to last forever.
So, there’s a case of where you had an extreme situation, it was against all reality in terms of how long it could last, and it was one of these rare opportunities where going against the trend with a major bubble having developed, where you could make some serious money.
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Business Insider is the fastest growing business news site in the US. Our mission: to tell you all you need to know about the big world around you. The BI Video team focuses on technology, strategy and science with an emphasis on unique storytelling and data that appeals to the next generation of leaders – the digital generation.
