What does a devalued yearling market mean to you?

[turninforhome10]

With one of the greatest economic turning points on the horizon, what does a devalued yearling market do, in both the short and long term, to the quality of horses available to bet on?
http://cs.bloodhorse.com/blogs/hammertime/archive/2011/07/18/The-Deflation-of-a-Dream.aspx
What state programs will get stung the hardest? Will the pinhooker survive?

IMHO, this will have a profound effect on how we get from foaling to starting gate. With little speculation capital around, one would think that a natural and painful swing back towards the owner breeder would have to occur. The margin for the middleman is going to evaporate.This should also decrease the number of horses being bred. Planning a mating for sale is going to become a more precise business venture. Again IMHO the whole things comes down to mare power. While Lamboguy pushes gold as a hedge in a declining market, I would think that money behind mare power is going to become the new driving force. The stallion industry has a lot to think about.
It will be interesting to see how the FT sale in NY goes.

[redshift1]

With one of the greatest economic turning points on the horizon


What are you referring to ?

[Seabiscuit@AR]

Lower stallion values will mean cheaper yearling prices which is good for American racing. Cheaper horses will mean more people can afford to race horses. Horse prices coming down are a must

The fact that the lucky people who own the Kentucky Derby winner will only get $10 million instead of $20 million for the stallion does not matter if you only had to pay 100K for the horse as a yearling instead of 200K. In other words the odds of getting a return on your yearling purchase should remain the same. It will just mean you need a smaller stake to get into the game and you will get a smaller prize at the end if you have some luck

High horse prices are like high house prices. High prices advantage older established players who are already in the game (home owners or stud owners) but they disadvantage new players coming into the game who are yet to buy that house or that horse

You don't want a situation where outfits like Coolmore and Darley basically have control of most of the best horses and nobody else has much chance of owning a good horse

[turninforhome10]

What are you referring to ?
Are you in a hole? Currencies are trembling all over the world. Speculation on the markets have become treacherous for even the best traders and with credit markets drying up even the major players are changing direction. How can anything in the world markets be certain without solid US treasuries?

[redshift1]

Are you in a hole? Currencies are trembling all over the world. Speculation on the markets have become treacherous for even the best traders and with credit markets drying up even the major players are changing direction. How can anything in the world markets be certain without solid US treasuries?


Are you predicting an imminent economic collapse ? Because if you are who possibly would be buying race horses let alone betting on them.

[turninforhome10]

Are you predicting an imminent economic collapse ? Because if you are who possibly would be buying race horses let alone betting on them.
Thats the point of this thread.

I am not predicting anything other than a severe correction of the markets. Which leads to the question of who is going to sponsor the product to which we bet on? Who will have the money for speculation of the yearling and 2yo markets?

[redshift1]

Thats the point of this thread.

I am not predicting anything other than a severe correction of the markets. Which leads to the question of who is going to sponsor the product to which we bet on? Who will have the money for speculation of the yearling and 2yo markets?

With all respect you said "with one of the greatest turning points on the horizon" that sounds pretty dire, way beyond a severe correction.

But that's secondary to your post, my uninformed opinion is the loss to racing will be proportional to any potential downturn up to and including the relegation of racing back to local fairs and farming communities.

[FenceBored]

Lower stallion values will mean cheaper yearling prices which is good for American racing. Cheaper horses will mean more people can afford to race horses. Horse prices coming down are a must

The fact that the lucky people who own the Kentucky Derby winner will only get $10 million instead of $20 million for the stallion does not matter if you only had to pay 100K for the horse as a yearling instead of 200K. In other words the odds of getting a return on your yearling purchase should remain the same. It will just mean you need a smaller stake to get into the game and you will get a smaller prize at the end if you have some luck

High horse prices are like high house prices. High prices advantage older established players who are already in the game (home owners or stud owners) but they disadvantage new players coming into the game who are yet to buy that house or that horse

You don't want a situation where outfits like Coolmore and Darley basically have control of most of the best horses and nobody else has much chance of owning a good horse

30k would have bought (on average) 45% of the yearlings at Keeneland Sep each year since 1999 (some years more, some less). 100k would get you at least 70% of the yearlings. There are already plenty of inexpensive horses.

[Robert Goren]

30k would have bought (on average) 45% of the yearlings at Keeneland Sep each year since 1999 (some years more, some less). 100k would get you at least 70% of the yearlings. There are already plenty of inexpensive horses. 30k is still a lot of money for a horse that might not even see the race track. How many sold yearlings will even earn their sale prices let alone pay for their training expenses?

[forced89]

Lower prices will allow me to buy a horse I otherwise wouldn't be able to buy. IMO this is a plus.

[turninforhome10]

With one of the greatest economic turning points on the horizon, what does a devalued yearling market do, in both the short and long term, to the quality of horses available to bet on?
http://cs.bloodhorse.com/blogs/hammertime/archive/2011/07/18/The-Deflation-of-a-Dream.aspx
What state programs will get stung the hardest? Will the pinhooker survive?

IMHO, this will have a profound effect on how we get from foaling to starting gate. With little speculation capital around, one would think that a natural and painful swing back towards the owner breeder would have to occur. The margin for the middleman is going to evaporate.This should also decrease the number of horses being bred. Planning a mating for sale is going to become a more precise business venture. Again IMHO the whole things comes down to mare power. While Lamboguy pushes gold as a hedge in a declining market, I would think that money behind mare power is going to become the new driving force. The stallion industry has a lot to think about.
It will be interesting to see how the FT sale in NY goes.



So much for that idea sorry to bring up an old thread but after the first 3 days the Keeneland Sale is going extremely well. Buyers have been willing to go to six figures on numerous occasions
Sale Topper so far
1.2 Mil Bernardini out of Silk n’ Sapphire by Smart Strike Buyer Benjamin Leon Jr.’s Besilu Stable
How hot is Bernardini?
The gross revenue rose 20% from a year ago while the average price increased 22.4%. The median price, meanwhile, climbed 30.8%.

Read more: http://www.bloodhorse.com/horse-racing/articles/65025/business-booms-in-septembers-third-session#ixzz1Xtyd81aa

[Hanover1]

Imo many of the current players will still be in the game, and will see bagains galore at the sales via cheaper averages across the board. The horses themselves will still be a viable product. Contraction is due to an extent anyways, so perhaps a downturn could bring a needed correction to the availability of quality racing. Fewer tracks, fuller fields, solid fields.

[davew]

I think it will squeeze out some of the smaller breeders


other breeders will be forced to run more of their stock

more maiden claimers and lower claiming prices, making maiden races more competitive

[Ian Meyers]

This really is great news!!...

Other than the fact that virtually EVERY farm in central Kentucky is significantly underwater and a great percentage are in danger of imminent foreclosure.

According to my buddy that sells farm properties in and around Lexington, current appraisals are coming in an 25-50% of where they were 5 years ago. Many small breeders are already looking for alternative use for their properties. All the major breeders are experiencing significant collection issues with stud fees due. Many mare owners have decided they're better off walking away from their weanlings rather than pay the stud fee due for a horse that would bring a fraction of what they owe.