Where to buy a Thoroughbred RacehorseHow can you buy a thoroughbred racehorse?
It was coached by Todd A. Williletcher, who has two ponies in the Kentucky Derby on Saturday, and was rode by Johnny Velazquez, who won the Derby last year. After my race days I came to the conclusion that horseracing is probably the most passionate form of investing, the most risky and emotional, even though it has its perils to put cash into making movies.
There' s the pleasure of gaining, of course, but also the falling emotion that plagued Mr Bolton when his steed cast the jockey. Along with the pleasure of a great win come the dream of high licensing costs, but intelligent owner know that the prize money spent on a horses has nothing to do with its destiny.
"We' ve been selling Derby champions for less than $20,000 and a Derby champion for $4 million," said Nick Nicholson, Keeneland's leading thoroughbred Auctioneer, Nick Nicholson, Lexington, Ky., who last year won all three Triple Crown Champions. A lot of those who enter the equestrian business after earning cash in another area know that sports are a high first mover.
When they are clever, they will realise that there are many ways to make a living in sports that are overboard and far from the dirty schedules of horse races in the bottom shoots of the game. However, if these beginners are not cautious, they can just as readily spend too much cash as they have ever thought of for a horse, with little in exchange.
Mr. Bolton, who was raised in Maryland with saddle-horses, knew enough to know he needed a scheme. Breeding dues for masculine animals - known as the colt to maturity - are the place where property can be made. In return for this payment, the mare owner receives the foal at a much lower cost than at bidding, together with the hopes that the foal will grow in size.
That' s what Barry Irwin, proprietor of the Team Valor International race consortium, did. She had her first filly Animal Kingdom who won the Kentucky Derby last year. In order to determine the value of the animal for a consortium, Mr. Irwin Animal Kingdom put it up for bid at the Keeneland annual or yearling auctions, and repurchased it for $100,000.
Said the stallion was valued at $6 million now. The way someone purchases a horse is crucial to his return on capital. Whilst everyone has an idea of where and how to find the best ones - Mr Irwin gets most of his stock from Europe - the sense of responsibility is for the risks associated with a single animal that all winning purchasers part in.
After all, these are pets, and on this Saturday one or more ponies will certainly be scraped in the derby before stoppage age. When you buy, the purchase option is simple: either you buy one after the other like a share pick-er, or you put your cash together in a syndicate like an investment trust that buys several racing ponies - and hopes that one big pony compensates for the costs of the other.
Mr. Irwin's race group, which has a Went The Day Well in Derby riding Mr. Valezquez, is a classical consortium. Humans can buy a 2. 5 to 10 per cent proportion of any horse, and everyone then will pay a part of the overhead that can run up to $60,000 a year to a horse, and get a part of the profits.
Mr. Irwin said he made cash by writing down the prize he was paying for the pony, taking 10 per cent of the winnings and earning a fee when the pony was bought. Crawford, a solicitor, celebrity fundraiser in Iowa and director of Donegal Racing, a newer consortium, has a different mindset.
It establishes endowments which are held by all the horse it has for one year instead of dividing the property in individual pieces. Paddy O'Prado, the surprising third in the Derby 2010, was his first owner. Dullahan, a Derby favourite. Nevertheless, most people buy one year old horse.
There are many unknown things at this stage about how the 3 year old will behave. A hedgerow is a habit known as "pinhooking" where an individual or group buys and works with a yearling before they sell it as a 2 year old. The strangest thing about this year' s Derby is that of Union Rags, another favourite twice held by Phyllis Wyeth, Point Lookout Farm proprietor and Jamie Wyeth's wife.
When she was a youngster, she was selling the stallion for $145,000 in 2010 because her bookkeeper said she had to make a win this year. Said that in about 75 per cent of the cases he reached break-even or made a living, and that drew investment. However, the eve of our conversation, Mr Woods said that he had been selling a $30,000 dollar old stallion for $100,000.
Naturally, what would a history of horseracing be without a history of high risks and high rewards? Mr Bolton and two partner bought Curlin in 2007, who was three years old and had just won his first 12 3/4 length running. In the derby, Curlin finished third, first in the Preakness Stakes and then in the Belmont Stakes.
Mr Bolton sells his share at the peak of the bladder nine month after the purchase, with the value of curling valued at nearly $50 million.