Filed under: Food, Ripoffs and Scams

A Houma, Louisiana man is upset that a buffet charged him extra because of his supersized appetite.

Ricky Labit was a regular at the Manchuria Restaurant, and was perturbed when he and his wife’s cousin ate there and were given a bill for $46.40, roughly double the normal rate.

According to the Associated Press, the waitress told the men that ‘Y’all fat, and y’all eat too much.” The man told a reporter that “I was stunned, that somebody would say something like that. I ain’t that fat, I only weigh 277.”

The debate over the bill escalated until the police were called (Taxpayer dollars at work…) and the man was ultimately offered the meal for free but asked never to return again.

While I don’t normally take the side of overweight eaters in their quest for additional calories, I think the buffet is being ridiculous. Isn’t one of the risks of operating a buffet that people with large appetites will eat more food than you can profitably afford to serve them?

And if you say “All you can eat, $12.95″, that’s what it means — You can’t charge people double for eating all they have the ability to eat. What do you think?

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Filed under: Rumors, Private equity industry

A good sign of a bottom in an industry or market is when private equity firms begin to get interested. LBO interest indicates that the stocks are so beaten down that some very smart people think they can use debt to buy the entire company, and then use the company’s cash flow to service it.

Now the Carlyle Group, the famed private equity firm that was among the first to spot signs of trouble in credit is “getting close” to buying up beaten-down financials. According to the Wall Street Journal, “In July, the firm hired Edward “Ned” Kelly, former chief executive of Mercantile Bankshares Corp., to head a new, 10-person team to look for financial-services deals. His focus includes distressed businesses where a jolt of Carlyle capital could help mend things. He also is watching big, integrated financial-services companies that might need to divest themselves of solid subsidiaries to raise cash in a hurry.”

KKR has also expanded its team looking at financial services stocks. Should ordinary investors follow suit? I’m not so sure. There are tremendous transparency problems associated with the sector, as the wave of surprise subprime writedowns showed. It’s hard to do securities analysis to determine if a stock is a good value when the financials aren’t reliable.

You might miss out on a great buying opportunity by waiting for more information and disclosure, but that’s a price I’m willing to pay. Buying companies with financials you don’t really understand isn’t value investing: It’s speculating.

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