The Practical Question

What would I do today if were going to invest $50,000, $25,000, $10,000, or $5,000 right now to invest in horses?

That is a difficult question that I really do have enough information to answer just yet, but I will try anyway.

At this moment I would prefer to wait until next year. I think the high buyback/withdrawal rate at the top end of this sale will mean more bargains next year at Ocala/Timonium. I also believe the death of Justice Ginsburg makes that election of Joe Biden a much higher probability than a week ago. I think the stock market will be 20-40% lower after the election, which makes waiting until 2021 a better idea.

In all honesty I still do not know what your “expected loss” will be when you invest in horses. Is that number -15% or -50%? I still do not know the answer to that question, but I am working every day to find the answer.

Just for fun let’s ignore the “wait until next year” idea, and try to answer the question today.

In theory, I like the idea of buying yearlings better. The horses do not have to be rushed to work a furlong in 10.1 too soon in their lives. That logic seems almost unassailable, but there is a problem.

Right now I think you can find “bargain” stamina/late developing horses for bargain prices at Ocala/Timonium. I have no hard data to support this opinion, right now it is just my intuition. There is also more downside risk in buying a yearling, 20-25% will never make it to the races.

In all honesty I was also not that impressed with the horses and prices that the partnerships selected at the yearling sales. That might seem a harsh judgement for a guy who has only been doing this four months, but I must “call them as I see them”.

Right now I lean ever so slightly toward buying from the training sales, but I also am leaning toward buying a whole horse rather than a partnership.

Again just for fun, let’s eliminate the whole horse option and waiting for Ocala/Timonium, and focus on the best yearling partnership investments right now.

Should you invest in a group of horses, or pick individual horses?

In theory I like like the group idea better, but in practice I am not leaning toward individual horses. I am just not that thrilled with what the groups are doing.

Starlight bought plenty of expensive horses, but I still worry about there “anti-pedigree” approach. I guess Ten Strike will announce their group later, right now they only show as buying two horses (neither of which I liked). There is also incomplete information on Centennial, Little Red Feather, and Bourbon Lane right now. That leaves Donegal.

I really wanted Donegal to be the answer, but overall I was not thrilled by their selections. I loved the Curlin, but not Uncle Mo’s, the Distorted Humor, or the Hard Spun. They were not terrible selections, just not what I was looking for. I will watch with interest, but not invest this year.

That leaves the other partnerships selling individuals horses. In theory I would like to invest with the smaller players. In practice that is not possible because I just have not done enough due diligence on these smaller guys to actually recommend them. It is my sincere desire to change that by next year. I would love to recommend Ironhorse, Pocket Aces, Zilla, or even Don’t Tell My Wife Stable today, but I just do not have enough information. I am still evaluating MyRacehorse.com, but they have not put their new yearlings on their website so far. These smaller guys also charge less in terms of fees, but I have more work to do.

That leaves West Point and Eclipse at the moment. I have done enough due diligence on these guys over the years to be comfortable investing with either of them. I realize their higher fees might reduce my returns, but their results indicate I might have some fun in return for those fees. I wish I had a better answer right now. I am writing this blog to get a better answer to the fee question.

In practice my choices are the 7 horses available right now at the West Point website, and the 8 horses that Eclipse will offer today at noon.

Let’s rank those 15 horses:

1. Connect – West Point, 5%/$17,600 – I think Connect is an undervalued sire, and I just like the photo. I like the Seattle Slew pedigree through Vindication
2. Air Force Blue – Eclipse, 3%/$9,750 – Love the sire and the dam’s pedigree, do not like the price paid, if they had paid $150,000 I would be a real world buyer
3. Declaration of War – West Point, 5%/$21,400 – I like the concept of a turf horse, but really do not like the price paid
4. English Channel – Eclipse – 6%/$6,000 – Goldilocks problem, is the price too low?
5. Speightstown – Eclipse – 3%/ $4,800 – not a Speightstown fan, but upgraded when he is turf meant
6. Frosted – West Point 5%/26,400 – I like the idea of Frosted, I thought there were cheaper alternatives
7. Curlin colt – Eclipse – 3%/$15,000 – ok sire, ok pedigree, solid not exciting
8. Curlin filly – Eclipse – 3%/$13,500 –
9. Gun Runner – Eclipse – 3%/.$4,800 – intrigued by the price, but do not like the dam’s pedigree
10. Dialed In – West Point 5%/$14,900 – I like Dialed In, but not the dam side of the pedigree
11. More Than Ready – West Point 5%/$17,600 – I think you overpay for the precocity of MTR
12. More Than Ready – Eclipse – 3%/$5,550 – not excited by dam’s pedigree
13. Arrogate – Eclipse – 3%/ sold out – Maybe better value in Arrogate next year
14. Mastery – West Point – 5%/$32,000 – Mastery is interesting, but the price is too high
15. Street Boss – West Point – 5%/$19,000 – Not a Street Boss fan at all

If I were spending $50,000 I would buy the Connect and the Air force Blue, and fill in with some of the smaller partnerships over the next few months

If I were spending $25,000 I would buy either the Connect of the AFB, and add some smaller partnerships later.

If I were spending $10,000 I would think about the English Channel, but also think about the smaller partnerships.

If I had to rank the smaller partnerships based solely on what they have bought at Keeneland so far it would be:

1. Don’t Tell My Wife
2. Ironhorse Racing
3. MyRacehorse.com
4. Victory Racing
5. Zilla (higher if you are a Nyquist fan)
6. Pewter
7. Pocket Aces