Leading Money Loser List

General racing discussion.

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bdw0617
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Postby bdw0617 » Thu Mar 08, 2012 12:22 am

kimberley mine wrote:
bdw0617 wrote:I

the people, at the first book for the most part,are not necessarily there to.. they aren't there necessarily on the quest for the best bang for their buck. they are there to be seen, they want to be associated with the best just as much as they want to win. they don't want to just win they want to win big races. they not only want to win big races, they want to do it with the best / most established bloodlines they can. Because there is a small handful of horses that makes all this possible, you get fireworks. fireworks drive up price.


Look at it this way: the people who are fishing in the Book 1 pool are not there to buy racehorses. They're speculating on the value of future breeding stock.

Look at Fusaichi Pegasus. He was by Mr Prospector out of a Danzig mare from a high class family--breeding was perfect, if he would run. And run he did. That $4 million that was paid out for him as a yearling suddenly seemed like a bargain compared to the $60 million Coolmore paid for him in syndication--15 times his purchase price PLUS his substantial winnings on the track. At stud, Coolmore priced him in such a way that he would pay off that $60 million in his first 3 years. Everything else has been pure profit for the shareholders. Even if he stands at 15,000 a year for the rest of his career, and only covers 90 mares in a year in both hemispheres (probably on the low end), 20 shareholders would make a minimum of $60,000 each accounting for the expenses related to his care.

The same can be said for buying Mariah's Storm and putting her in foal to Storm Cat. Coolmore won BIG on that gamble, even bigger than Fusaichi Pegasus.

The reason those buyers are focusing on those bloodlines is that those bloodlines are the ones where speculation has a snowball's chance of paying off. Nobody is going to pay top dollar for a son of Pleasant Tap, even if he were a full to David Junior, either at the yearling sales or in syndication. Nobody is going to pay high 6 to 7 figures for a daughter of Include, even if she is a Gr-1 winner (Panty Raid, Cash Included). They would for a daughter of Hasili, even if her sire had been a dachshund, because Hasili has shown such an amazing ability to breed the high-dollar, high-stud fee colts.

It's gambling, off the track.
very good and informative post

so let's look at what you just stated. with that said, the question you have to ask yourself or i have to ask is, just who interests are being served, or in other words, who is trying to hit the home run?

what i mean is, alot of those horses are bought by old money in the game. like you said who are gambling off the track.

but alot of people, who are buying the horses, could care less what the horses stud value is, or what his prospects of winning off the track are. alot of these people buying horses are people who made some money in other ventures and want to do something exciting and have a decent race horse.

do you think that it's accurate to say that agents look at a person's finances toa cess where they shoudl be playing and not their actual interest. in other words, if a client goes toan agent and says he wants a stable of 4-5 horses that could be really good race horses that can stay sound for a while and he can see them run, that no matter what his goals are, if hes playing with say, 5 million dollars, the agent is going to advise him that he needs to be on some of the horses in the first book even if that's not what's in the owners best interest?


an example I look at Frank Fletcher, guy who owns a bunch of car lots in Arkansas. he runs a very very local circuit, runs a few at Louisiana downs and oaklawn every year. he likes 2YO's. he owned officer rocket a few years ago.

so when i see he goes out and buys the most expensive 2YO in training last year, i have to think someone has gotten into his ear and told him that this is the type of horse he needs to buy if he wants to "compete". for what he does, FF has had a successful operation. high claimers, allowance horses ,without breaking the bank to get them. now he's spending a million dollars on horses.. he has a lot of money but he's not coolmore and there are only so many trips to the bank before a man like that can take before he does t just go back to being a regional guy but before he just "quits" all together.
"When the solution is simple, God is answering.”
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kimberley mine
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Postby kimberley mine » Thu Mar 08, 2012 1:53 am

bdw0617 wrote:
so let's look at what you just stated. with that said, the question you have to ask yourself or i have to ask is, just who interests are being served, or in other words, who is trying to hit the home run?


Define home run. It could be to have a horse to win the Kentucky Derby--Sheik Mo tried to buy one his whole life, even though it never happened. It could be to buy proven racemares from the highest quality families available. They rarely come to market, and when they do, the prices for them are astronomical. Ashado and Azeri come to mind.

what i mean is, alot of those horses are bought by old money in the game. like you said who are gambling off the track.


Not always. The guy who bought fu-peg was a newcomer. And it's not always old money playing the game, but either shareholders in young expensive stallions, commercial stud farms looking for the next big super-hit, or hedge funds looking for somewhere to park their money.

The REAL old money tend to not buy, but breed their own. The Phipps', the Aga Khan, the Niarchos family, etc. They might spend big money once in a blue moon, either for the best possible quality fillies or for that one special colt, but by and large, they are patronising stallions that other people stand, racing their best horses, and not buying. I mean, why would they? If you bred Zarkava and have her dam and two sisters, why shell out millions on a fancy sales yearling instead of maybe a hundred grand for a stud fee, if that?

Re: hedge funds, I remember seeing a blog post maybe in 2007 about a Kingmambo filly purchased by the fund, with the stipulation that racing stock was VERY speculative and risky, but if you hit, you hit big. And then there's IAEH and Big Brown: http://www.ieah.com/docs/IEAH_Company_Profile.pdf

but alot of people, who are buying the horses, could care less what the horses stud value is, or what his prospects of winning off the track are. alot of these people buying horses are people who made some money in other ventures and want to do something exciting and have a decent race horse.


And there's a market for those folks, too, BUT I suspect the super-high prices are driven more by speculation than by newcomers.

do you think that it's accurate to say that agents look at a person's finances toa cess where they shoudl be playing and not their actual interest. in other words, if a client goes toan agent and says he wants a stable of 4-5 horses that could be really good race horses that can stay sound for a while and he can see them run, that no matter what his goals are, if hes playing with say, 5 million dollars, the agent is going to advise him that he needs to be on some of the horses in the first book even if that's not what's in the owners best interest?


I couldn't even begin to answer that question.


an example I look at Frank Fletcher, guy who owns a bunch of car lots in Arkansas. he runs a very very local circuit, runs a few at Louisiana downs and oaklawn every year. he likes 2YO's. he owned officer rocket a few years ago.

so when i see he goes out and buys the most expensive 2YO in training last year, i have to think someone has gotten into his ear and told him that this is the type of horse he needs to buy if he wants to "compete". for what he does, FF has had a successful operation. high claimers, allowance horses ,without breaking the bank to get them. now he's spending a million dollars on horses.. he has a lot of money but he's not coolmore and there are only so many trips to the bank before a man like that can take before he does t just go back to being a regional guy but before he just "quits" all together.


Are you talking about Rocket TwentyOne? If so, you're talking about apples and oranges, or rather yearling sales versus 2yo in training sales.

Rocket Twentyone is already a Gr-3 winner, stakes placed at 3, and training well at Oaklawn. She's got upside as a 3yo runner, probably in sprints, and enough page and performance on her to get back a good chunk of her purchase price auctioned off as a broodmare prospect. He's got a good moneymaking system with her, too....he could send her up to Woodbine to run out her statebred allowance conditions, AND then find her allowance races for other than statebred, meaning could have a NW2 other than maiden, claiming, or statebred, and have his filly with potentially 4-5 wins up against a field of freshly minted NW2x at Fair Grounds. If she were mine, I think I'd try to do that...purses at WO are GOOD and she's eligible for it, why not? Or, if she continues to be stakes calibre, run her in stakes. He might be pointing her for the Fantasy. Either way, if she stays sound and runs, she's already recouped over 20% of her purchase price in only 2 wins, is sound and able to recoup more, and has residual breeding value. I don't think I'd call that a bad investment!

The thing about 2yo in training sales is that, historically, horses out of those sales have outperformed high-dollar yearlings by a country mile. You're buying a proven level of ability, instead of a pedigree and looks.

Back to Fletcher, if he's been running a successful string of AOC horses for a while now, then he's not a new guy being hoodwinked, he's an owner who is stepping up his game. Based on the results he's had so far with Rocket Twentyone, he's doing a decent job of it.

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Joltman
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Re: Leading Money Loser List

Postby Joltman » Thu Mar 08, 2012 8:15 am

casallc wrote:Many tout Todd Pletcher as the wunderkind of thoroughbred trainers but how many look at ALL of the data before crowning him as king of trainers? Pletcher gets a large number of top bred, high dollar prospects to work with because owners are a fickle group who find it easier to follow fads than to look a little deeper into the facts. Sure Pletcher has had some nice runners that have made a lot of money but how many VERY EXPENSIVE horses have become VERY CHEAP claimers under his tutorage – I contend there has been more value lost with Pletcher horses than value gained.

This conclusion came to me purely by accident while looking for a young stallion prospect to claim for a friend rather than send his mares out in this economy. In scanning entries and results for cheap horses all over the U.S., I found one common denominator - Todd Pletcher. I will admit that my conclusion was obtained using the SWAG method (scientific wild assed guess) but I think it will stand up if anyone wants to actually take the time and effort to put a pencil to it. The proverbial double edged sword rule should apply when anyone chooses a trainer (or anything else). Good horses make good trainers but how many good horses are made into cripples or cheap claimers by “good trainers”? Pletcher consistently ranks tops on the list of leading money earners but there is no list for the top money losers – a list that should be just as important in choosing a trainer.


Someone did an analysis of some time back of D Wayne Lucas in his heyday, from whom TP learned the craft (horses and the business). The losses were abysmal, and the averages, even with the big G1 winners, were awful.

But the business plan worked for DWL and TP. It's making them money because their owners are buying an experience, not so much a racehorse.


jm
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Postby Hotwalker » Mon Mar 12, 2012 7:37 am

I give Pletcher a break on this because I think he is on the trainer short-list of anyone spending tons of money on a yearling. If he was the house trainer for Phipps/Janney, he wouldn't have as many high priced duds on his resume.

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madelyn
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Postby madelyn » Mon Mar 12, 2012 7:55 am

I think this could be a somewhat sensitive issue. HOF trainer (pick one) has big money, big time owner (BMTO) but doesn't pick out that horse at a sale - BMTO has found a "Hot new agent" and HOF gets no input. $$$$$ Yearling arrives from the sale, picked out by HNA. HOF thinks the yearling is a POS but doesn't have the heart to tell BMTO. Doesn't want to ruin the relationship. HOF goes on with yearling, since trainers have to be eternal optimists and it has happened a few times before that a good racehorse is found inside a POS yearling.. when it doesn't work out that way HOF trainer is blamed, whether or not it is actually his fault..

Another little detail is that the HOF's out there are not the magi. The pinhookers and prep folks out there have gotten awfully canny about hiding whatever it took to get that yearling to look a thousand, or a million, times better than the underlying horse actually is. It can sometimes be hard to see through all that.
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Postby FiftyYearsPlus » Mon Mar 19, 2012 7:19 pm

This is a pretty savvy group.

Looking at it another way, the top 60 sires from the leading sires list average about 70% starters, and about 50% winners at any level.
So about a 30% never make it to a race. And these are foals that are by sires with perhaps a median $50K stud fee out of quality mares worth perhaps $150K each. And they have been pampered during their upbringing and sent to big name trainers.

Median earnings for these foals is approximately $26.5K.

Either the stud fees are way out of line or the so-called top trainers don't know how to do their jobs and, in my experience, both are true.

When I got back into the business some dozen years ago, I felt that I could do better. So I bred, raised and trained eight babies so far on a comparative shoestring and have approximately doubled the median earnings per foal earnings cited above. The average stud fee was under $16K.

The stat that I am most proud of is that seven of the eight were open maiden special winners and, at least, allowance placed.

I've made more than my share of dumb mistakes but none of them ended a career.

I'm sure there are a lot better horseman out there than me, but if a small stable horse lover can way overperform the superstars of the sport, maybe many of these superstars aren't.

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Bast
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Postby Bast » Mon Mar 19, 2012 7:34 pm

madelyn wrote:I think this could be a somewhat sensitive issue. HOF trainer (pick one) has big money, big time owner (BMTO) but doesn't pick out that horse at a sale - BMTO has found a "Hot new agent" and HOF gets no input. $$$$$ Yearling arrives from the sale, picked out by HNA. HOF thinks the yearling is a POS but doesn't have the heart to tell BMTO. Doesn't want to ruin the relationship. HOF goes on with yearling, since trainers have to be eternal optimists and it has happened a few times before that a good racehorse is found inside a POS yearling.. when it doesn't work out that way HOF trainer is blamed, whether or not it is actually his fault..

Another little detail is that the HOF's out there are not the magi. The pinhookers and prep folks out there have gotten awfully canny about hiding whatever it took to get that yearling to look a thousand, or a million, times better than the underlying horse actually is. It can sometimes be hard to see through all that.


Is this the story of the Green Monkey???
May 2013: Plan ahead now for the Phalaris/Teddy Centennial!
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A horse gallops with his lungs
Perseveres with his heart
And wins with his character. --Tesio

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Bast
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Postby Bast » Mon Mar 19, 2012 7:39 pm

FiftyYearsPlus wrote:I've made more than my share of dumb mistakes but none of them ended a career.

I'm sure there are a lot better horseman out there than me, but if a small stable horse lover can way overperform the superstars of the sport, maybe many of these superstars aren't.


Doing something well frequently comes down to the willingness to pay attention to all the small details and make sure they are done properly. I will never believe one "trains" a horse without putting hands on their legs every day, and personally know what is going on there. Somebody else can give the horse a bath, but the trainer needs to see the eyes, the coat, feel the legs, and watch how the horse moves and eats...every day.
May 2013: Plan ahead now for the Phalaris/Teddy Centennial!

*****************************

A horse gallops with his lungs

Perseveres with his heart

And wins with his character. --Tesio