April 24, 2024

You’re the Boss Blog: A Restaurant Copes With the End of the High Season

Susan Meisel

Start-Up Chronicle

Getting a restaurant off the ground.

Ebb tide: the period between high tide and low tide during which water flows away from the shore. Also called falling tide.

It is ebb tide in the Hamptons. Families are returning to the city or suburb whence they came, and their children are busy with play dates and soccer games and piano practice. The locals are glad to reclaim the roads and beaches, enjoying a solitude warmer than the autumn ocean. September and October may be the most beautiful months in the Hamptons — or the world — with pastel skies, open tennis courts, and still, starry nights. As a resident, this precious season makes for smooth sailing; as a restaurant owner, one needs a fancy flutter kick to keep afloat.

We toyed with the idea of introducing Sunday Brunch and Vegetarian Monday and Lobster Wednesday. Each one would require prices lower than our weekend $68 prix fixe, but money was not the trigger — we wanted to keep the restaurant humming, the staff employed and the word-of-mouth awatering. When we put all of the notions down on paper, it appeared more like a maze than a menu. Our collective heads were spinning. Even in an area accustomed to different nights dedicated to different deals, we were just trying too hard.

So we settled on Sunday Lobster Dinner, from 4 to 8 p.m., to attract families and folks on their way back to the city as well as all the regulars who love to dine at 7 and 7:30. The prix fixe would drop to $55, with a choice of appetizer, one of three lobster entrees, and dessert. Again, money was not the trigger: because of the prep time and pricing, which gets steeper in the off-season, lobster is about the least economical dish we serve, along with Long Island duck.

Before christening the idea, we had to do some research. Were lobsters available, were they good, were they affordable, were they sustainable? First stop, Blue Ocean Institute. Headquartered in Cold Spring Harbor, Long Island, the institute is the leading expert on all things marine on the East Coast. Whole Foods follows and distributes its guide to sustainable fish in each store.

According to the guide, American Lobster (Homarus americanus) has a light green light, indicating something just shy of perfect sustainability:

This Species is Wild Caught and sometimes known as Canadian Lobster, Maine Lobster, Atlantic Lobster.

American Lobsters, found from Newfoundland to North Carolina, are a long-lived species and an important commercial fishery. Landings of American Lobsters have increased greatly during the last decade and most populations have stable abundance. The American Lobster fishery is well managed in both U.S and Canadian waters…

Not quite satisfied, cognizant of the ever shifting exigencies of ocean life, Chef Isidori did more reading, talked to fishermen and purveyors, and then got in touch with Carl Safina, co-founder of Blue Ocean and a respected marine biologist who has authored a series of excellent books. Mr. Safina responded the same day by e-mail:

“The trapping, local or otherwise, is not in my opinion hurting lobsters. Warming waters seem to be hurting them and killed them wholesale in L.I. Sound in the late 1990s. I don’t think you need to worry, local or otherwise, about American Lobsters from a buyer’s or chef’s standpoint …”

Mr. Safina was referring to three days in 1999 when 90 percent of the lobsters of Long Island Sound were wiped out. Some suspect it was global warming that raised the deep water temperature two degrees; others say it was pesticides flushed by Hurricane Floyd into the Sound. In any case, lobstering here has never been the same. A fisherman who landed 400 pounds a day in the mid-’90s is lucky to haul in a quarter of that today. Many have stopped trying. A few claim to be witnessing a mild comeback.

We sent an e-mail to 500 addresses we have collected:

It is true that more lobsters are caught in the summer than winter, but that is only because the demand is higher and the fishing easier. During the winter months, lobsters move further offshore, requiring boats to travel greater distances, and deal with harsher conditions. But lobsters are trapped throughout the year, and many fishermen and chefs think the colder the water, the better the meat.

Southfork Kitchen starts Sunday Lobsters this week. It is a $55 three-course prix fixe that features three kinds of lobsters:

Spicy Lobster “Arrabiatta” with Green Thumb Chilies over Pappardelle Pasta

Curried Lobster with Young Ginger  Satur Farm’s Bok Choy

Lobster “Potage” with Organic Root Vegetables  Garden Herbs

Thank you and take care.

A few folks wrote back to have their names removed from the list. Another few asked if the lobsters were local.

We also advertised lobster night in Dan’s Paper and The Southampton Press. One sixth of a page in each. We wanted to surprise no one with our prix fixe or our treatment of lobster — nothing broiled and buttered — so the ad was the menu verbatim. We did the same on Facebook and added the details to our Web site.

Last Friday night, we entertained 75 guests. Saturday night, 95 guests. For Sunday Lobster Dinner, eight people showed up. That’s eight. An ironic homophone with ate. Four of them complained about the limited menu and the other four were Chef Isidori’s relatives.

Still, we are not quite ready to cry uncle.

Bruce Buschel owns Southfork Kitchen, a restaurant in Bridgehampton, N.Y.

Article source: http://feeds.nytimes.com/click.phdo?i=618de40de056276e556506b67659c47c

Fundamentally: The Worry Meter May Overlook Some Warning Signs

So can investors calm down?

Unfortunately, the answer is no. The problem with traditional volatility gauges is that they’ve never been great predictors of future market activity. For example, the Chicago Board Options Exchange Volatility Index, or VIX, which measures fear based on Standard Poor’s 500 options contracts that are used to hedge volatility, was near its historical average and showed no worrisome rise in jitters on Oct. 9, 2007, at the start of the last bear market.

In fact, it wasn’t until November of that year, when stocks had already lost 10 percent of their value, that the VIX started flashing a warning sign, climbing to a reading of 30 — about twice the average.

“We know that huge shocks in the market can trigger large movements in the VIX,” said Jason Hsu, chief investment officer at Research Affiliates, an investment consulting firm in Newport Beach, Calif. “But it’s not clear that nervousness in the stock market can be picked up in the VIX before big movements in the market are felt.”

The same goes for another gauge of market skittishness — one that tracks fear by tallying the number of trading days when stock prices swing — up or down — by 1 percent or more.

By this standard, market fear is virtually nonexistent today, as the S. P. 500-stock index is on track this year to post 25 days of such 1 percent moves, according to InvesTech Market Research. That’s down from 76 days last year, 117 in 2009, and 134 in 2008.

But investors shouldn’t necessarily assume that smooth sailing is ahead.

Sam Stovall, chief investment strategist for S. P. Equity Research, studied days when the market had lost at least 1 percent of its value, going back to 1956. He found that in the final three months of bull markets, the S. P. 500 has only 5.7 such down days, on average. Yet in the three months after a new bear market begins, that number nearly doubles, to 11.

“A pickup in volatility seems to be more of a coincident indicator than a leading one,” Mr. Stovall said. Or, as I’d put it, volatility isn’t a problem until it becomes a problem. Still, this doesn’t mean that classic gauges of market jitters are worthless in analyzing risk. In fact, volatility gauges can be useful to bulls and bears alike.

Market optimists, for example, can take comfort in knowing that volatility readings tend to jump at big transitional moments in the market when there’s a great debate as to the general direction of stocks and the economy.

That may be why the biggest rise in volatility tends to take place in the first year of a new bull or bear market, when it’s hard for market participants to tell that a shift has even taken place. In the first year of a new bull market, for example, the market averages 29 days when losses exceed 1 percent, according to S. P. But in second years, that figure falls to 16. And in the third year of a rally, it drops to 11.

Mr. Hsu argues that there are plenty of reasons for investors to be worried these days — among them, slowing corporate earnings growth and continuing, tough fiscal challenges among governments worldwide. But the lack of a meaningful rise in volatility would seem to indicate that investors for the most part agree that we’re in store for a slowdown, and not another recession and bear market.

“This is more of a sign of lowered expectations, not a double dip,” he said.

Nevertheless, bearish investors would do well to keep tabs on volatility, market strategists say.

That’s because volatility can be a contrarian indicator. Indeed, “some of the most dangerous periods for the market have come when volatility was at its lowest,” said James B. Stack, editor of the InvesTech Market Analyst newsletter. “That’s when you have the most widespread sense of complacency in the market.”

A perfect example of this was in 2007, when the financial crisis was just starting and the VIX hovered between 16 and 18, about where it is today.

TIMOTHY W. HAYES, chief investment strategist at Ned Davis Research, said that the “time to be concerned is when volatility readings really start to pick up at the same time you see the market breaking down.”

So far, investors have witnessed half of that combination, as stocks have lost around 7 percent of their value since late April.

If selling should continue as volatility starts to climb, investors may really need to worry.

Paul J. Lim is a senior editor at Money magazine. E-mail: fund@nytimes.com.

Article source: http://feeds.nytimes.com/click.phdo?i=9ac42971cb2eed47ac0c64dea1bfaadc