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Horse auctions, I will try to explain.
Horses make it to the track in one of three primary ways--folks breed horses, raise them and race them. These are called homebreds. There are some horses that are sold privately off the farm to a racing outfit--this wintef I looked at some 2YOS privately but passed. Then there are the auctions. Most horses that wind up on the track, go thru an auction to get there.
There are 3 primary auction houses in the US. Keeneland Sales is the largest house. (think NYSE). Fasig Tipton is the oldest sales company, and is now owned by Sheik Mohammed of Dubai. And then there is the Ocala Breeders Sales Co (OBS) based in FLA. There are others, but those are the big three.
There are several different types of auctions-- in January, they have what's called the Mixed Sale, Horses of All Ages. Here you will find young Yearlings (horses just a year old--and all horses have their birthday on January 1 even though their birthdate may be April 5th); Broodmares in foal ( so a pregnant mom--you are buying the momma and unborn child; and the also broodmare prospects (potential moms) and older yearlings-- HORSES of ALL AGES is an apt description.
Next on the sales calendar beginning in February and going through May are 2YOs in training sales. So these are horses that are getting ready to go to the race track--you are buying a horse who you can watch run, be timed, and have the best sense of who the horse will be. Many buy horses in the Yearling sales to train and then flip in the 2yo sales.--this is called pinhooking. The problem w buying at these 2YO sales is that the horses are trained hard to make it to the sales before their bodies are ready for it--they are frequently injured in the process and become damaged goods.
The yearling sales, where we hope to be buying, begin in July and go through October--the biggest is Keeneland September. By far, the most horses sold at auction are yearlings. There is the Select Yearling Sale at Saratoga which was in August and 2 colts there brought $1 million +. We looked at a few horses at this sale and they each sold for $190k and above. Nicely bred, good looking horses--this auction brings the wealthiest buyers.
Keeneland has it's own version of Saratoga--the first 2 days of the Keeneland sale are held in the evening and some horses will bring over $1 million on those evenings.
What are folks paying for at a yearling sale? Family and good looks.
You start with the family. Before you head to auction, you scour the sales catalogs looking for the right families, the right combinations, the right style for what you are looking for and for what you can afford. In our case, we have folks working with us to narrow a big long list of likely candidates.
The catalog lists the pedigree of the horse--essentially the family tree. The father (sire) is up top and typically this is a very well credentialed horse--he's made a lot of money, won big races, is, in all practical terms, a stud.
Next on the page, is the mom. This is the 1st Dam. The huge prices go for Mares who have had a great record on the track, and then have had babies who have also burned up the track.
Black type. If a horse is capitalized in bold type, it means the horse has won a stakes race--the highest level of competition. If a horse is bold but not capitalized, that means the horse has PLACED in a stakes race (2nd or 3rd) but not won. And if a horse is in regular type, it means they have not won or placed in the highest level of competition. So...horses sell for the most when both mom and dad have bold black type and horses with little black type on the page bring peanuts.
This brings us to the 2nd and 3rd dam. If the 1st dam has no black type and even if she is unraced, the you begin to look at next generations to see the talent in the family. If grandma was a good run Eric, and she has had some other good runners as babies, then the family is strong. If no generation shows talent, then you likely are buying a pet and not a racehorse.
Certain stallions get certain types of runners. Some get horses that run short distances, some long. Some win early, some take time to develop. Some run well on dirt, some better on grass. The highest priced horses are colts who are bred to run the classic distances of the Kentucky Derby, Preakness and Belmont. That said, those are not the only races that horses run. Horses that were sprinters typically have offspring who are sprinters. Same goes for grass horses,etc.
Also very important is the Broodmare Sire--this is the Sire of the horses mom. These influences also dictate what type of runner the horse will be. So if you want a early running horse, you are looking for a winner at 2, who has winners at 2, with a mom who has won at 2, who's sire won at 2. You will get a horse who will run early if you put those pieces together.
Not all matches make a good horse. There are combinations of bloodlines that are called nicks. An A++ nick means that when these bloodlines are put together, there is a higher probability of success when matching the blood of this sire with this broodmare sire. A great sire may actually be lousy with a certain line of mares, A lousy sire may be awesome w a certain line of mares. If Bob married Sally and had kids and they all went to Harvard, played cello and started in D1 sports, that is a good nick. But if Bob married Susie instead and all the kids turned out to be deadbeats, well, that is a bad nick. You are looking for good combos--some everyone knows about, some are emerging and you make a bet they will work well together.
Ok. Nice family. Now what?
At yearling sales, you can't watch a horse run, but you inspect the horse to get a sense of it's athletic makeup, are it's legs straight, does it walk in a fluid way, how long is it's stride? A lot goes into inspecting a horse. At the sales grounds, horses are housed in barns by consignment--so Darby Dan is selling Hip 1006 and a bunch of other horses. You go to the Darby Dan barn and ask to see Hip 1006. They take her out of her stall, walk her for you and you get a sense of what she's like. You (or in our case) your agent, helps you grade the horse, the good, the bad, what you can live with and what just spells trouble.
The other thing you try to factor is who is selling the horse and who bred the horse. Some folks are good, some not so good.
Ok. Horse looks good and has a good family-- before we bid, we narrow the field to those we like best and we have them vetted. A vet looks over x-rays of it's knees, ankles, etc. Sellers pre-sale have the x-rays placed in a repository. You don't want damaged goods. The other test they do is on the horse's windpipe--is it restricted in any way? There are other biomechanical tests that can be done, but for now, let's keep it simple. The horse vets great.
We are going to bid.
The horses parade into the auction ring--like flights queued up to land. At Keeneland they will start at Hip 1 and go all the way to 4400 over the course of 2 weeks--300+ horse sell each day. It is a MARKET, nonstop flow of horses, bids, sellers, buyers, gamesmanship. As they walk up to the ring, typically you are out back there trying to get a sure sense of the horse--nervous or dull? There is a crowd back there looking at the horses as they go thru. Once in the ring, the bidding begins--on the 1st night it will begin at 100k, for us probably 10k. Sometimes you jump in early to beat back interest, others times you wait until the very end. Many times sellers will have a reserve set on the horse -- maybe it's 50k. They won't sell the horse until it exceeds 50k--you don't know that info and you are likely bidding against the seller until you get to the price they are willing to let go at. If you look at sales results, you sometimes see ($50,000 RNA). Reserve not attained. What is the horse worth, what's the reserve, what is your limit, how far will you, should you go, who else is bidding, are they in the room, on the phone, in the back, what is your last bid? There is an art to this which I have not mastered AT ALL, but the adrenaline absolutely starts going as you are live in the bidding for a horse.
Ok. We bought the horse, so what's next? A drink to celebrate, a check to write and the rest of it I will leave for the next chapter. For now, I hope these basics helped out.
Lets put the knowledge to work There is a sale in Florida, the OBS Yearling Sale that begins tomorrow.
I only looked at the beginning of the sale over the weekend, but if I was there, I would want to see a few.....
Website: http://www.obssales.com/CATALOG.html
and from this list, we'd probably narrow it to a few horses to vet after we looked at them--ending up w 1 or 2 to bid on. Why these? Like the combination of sire and mare, like running style and surface--meaning, probably going to run a bit longer on turf rather than short distances on dirt.
This sale will be an indicator of how strong the middle market will be in September.
So that's it. Later this week will post updates from the OBS sale and also some observations about how auction horses are doing at Saratoga and Del Mar, the 2 premiere summer tracks in USA.
Good Luck!
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