Ask The Experts
General Category => Ask the Experts => Topic started by: covelj70 on April 02, 2014, 03:19:14 PM
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ouch, he better be the freak I think he is to pull this off
he\'s going to need to be every bit of Big Brown to pull this off
can\'t wait for that race
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Jim,
Certainly agree not an ideal draw. That said, in looking at the PPs, not sure how many speed horses there are in the race and even the ones that are front runners don\'t have the kind of gas that Social Inclusion has. Neither Uncle Sigh nor Samraat are \"quick\" speed horses, nor is Shivarelli (although with Castellano, probably gets sent). Kristo has gas on occasion.
I too am looking forward to seeing this horse race. This next statement comes from somebody who has not owned horses, so perhaps I should shut my mouth, but I can\'t believe the business decision not to sell this horse. Unless the owner is already extremely wealthy, the upside/downside is horrendously skewed to the downside. Right now, a bunch of people, like you, believe this horse could \"be a freak\". And apparently some people are factoring that into a purchase price (8 million for 75%). Not only does have to win the Wood, but he has to win impressively to justify the offers or have them go up. He wins, in a normal 100 Beyer or so, by a length, and his price will go DOWN not up. Because many will view he isn\'t a \"freak\" and he got perfect conditions in the Honor Code race. (sort of like when good earnings come out and the stock goes down because it was \"priced in\" already)
God forbid he runs bad, his value drops off a cliff.
There was a horse a few years back, I think a filly, that shipped from Finger Lakes, and won at Saratoga. I believe she was named for the owner\'s dead wife. He turned down a big 7 figure offer for the filly. She then ran in maybe the Test or some other stakes and ran awful. I think she was back at Finger Lakes in small races shortly thereafter, never to be heard from again.
If there was ever a game to \"strike while the iron is hot\", this is it.
Good luck,
Jim
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Especially since he gets the money AND gets to stay in.
We need a market where we can short this stuff.
Given the post, the points deal and the jump to a big figure, I make him about even money to run in the Derby.
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.....the game is clean!!!
NYSGamingCommission (@NYSGamingComm)
4/2/14, 6:26 PM
Veterinary records for horses running in the 4/5 Wood Memorial are now online: gaming.ny.gov/pdf/04.02.14.W…. Summary: gaming.ny.gov/pdf/04.02.14.W…
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Draw makes it interesting; waiting to see the TG numbers. Assuming all the offer rumors are somewhat accurate still can\'t believe owner did not sell part of the horse.
Also good luck Saturday at Kee, looks like a good spot. Certainly enough speed in the race to help set up for off pace style.
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There\'s a frenzy of activity right now, we\'ll see whether it leads to something productive.
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Personally think that curtailing the use of legal/therapeutic meds is nothing more than a Public Relations exercise by the Clueless Clowns.This will result in less starts per horse, pressure the entry box and push smaller outfits over the financial edge.
The blowhards on the soap box and conspiracy idiots will pump there chest, the changes will be largely irrelevant except to expedite some contraction.
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Maybe the part he wanted to sell wasn\'t what they wanted to buy.
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The horse\'s name is Lisa\'s Booby Trap. He named her after his dead wife & his favorite strip joint -true story. There was a story in the local paper that he thought his wife had been reincarnated into the horse. It was 2010, I was just about to retire & a group of us from work had a picnic at Saratoga the 1st time she ran there. I really wanted to put on a show for them & I ended up hitting a decent P3 with her. She looked pretty solid on the Thoro-graph sheets, was something like 12/1 ML & ended up paying about $5. I won about $800 that day & looked like a hero instead of a goat. She was then entered in a turf stake, she may have gone off the favorite. My first reaction when she went on turf was the trainer was out of his mind. She finished last.
Here\'s her record from Horseracingnation: http://www.horseracingnation.com/horse/Lisas_Booby_Trap
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Mike, thanks for the heads up on this feed. Can\'t believe I didn\'t already follow them. Very timely.
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Box and Jimbo,
The offer was very much real.
There is quite a bit going on behind the scenes in this situation.
People on the board were invovled and its their place to share the info if they ever choose to, not mine. Fascinating stuff though
Me and some friends made an offer and got laughed at because we were in a different zip code dollar wise
Obviosuly you guys are right about huge downside but if the horse wins the Wood like the last race, he\'s worth at least 8m as a stallion already. Then if he wins Derby, he\'s 30m as a stallion.
That upside isn\'t the only reason the deal didn\'t go down but that\'s part of it.
Box, thanks for the thoughts on the Ashland. If she likes the synthetic, then huge shot because she\'s doing great. No idea if she will like it though. We won\'t have any idea until she hits the top of the stretch and really tries to dig into the stuff. Synthetic is a total crap shoot but everyone on the board knows from before the Breeders Cup how good I think she is on turf. Well see if it translates. Thanks again
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Boy, Jim I don\'t agree.
The last 5 stallions who won the Wood stand for between $10,000-$17,500. No way you can get to $8 million as a stallion prospect with a Wood win alone. Not even close. Social Inclusion\'s breeding is unproven at the moment. Pioneer of the Nile may turn out to be great (I hope so as I just purchased a 2 year old colt POTN out of an AP Indy mare) but still he is pretty unproven.
Social\'s 2 wins were gate to wire with the last race being an allowance race. The big plus is he got a big figure and beat a nice horse -- in 1 race.
Derby fever is really something. Oh to have a good 2 year old...
Mike
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What do you think a stallion that can stand for 20k and breed 150 mares a year is worth. That\'s 3m a year for 3 years before anyone figures out if their offspring can run a lick.
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I guess your math is correct but I have never seen a model with 150 mares for 3 years as an example of a stallion\'s value. I have had a few stallions and my model is much more conservative especially for an unproven stallion\'s sire. I have not had a really good horse for a while so possibly the model has changed.
Even though the babies won\'t run until they are 2 they still will be born and will be examined for confirmation, etc. before they are proven/not proven on the race track. He may be a nice horse. He may not be a nice horse. We will see. I hope he is. I just disagree with the stated value of a Wood winner based on recent history -- Tale of Ekati, I Want Revenge, Eskendereya, Toby\'s Corner, Gemologist, Verrazano.
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This is far from my sweet spot so your opinion is likely more valid than mine but I believe a few of those you listed traded for more than 8m.
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Of course, the key is what has their value proven to be? None of them frankly $8 million plus. Pioneer of the Nile is off to a great start as a stallion. He was very good. Babies are dong very well. Maybe will be an important sire. Absolutely not proven yet in my opinion.
Good luck in your decisions regarding your very good horses!
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Re: Shorting horses.
When social media IPOS are priced based on a bunch of kids\' A.D.D., it\'s no surprise...then again, the true value of the horse is the discounted future earnings times the chances of that event. So if the odds are 50% that he becomes a monster, and 50% that he already ran his best race, then the monster scenario would have to mean about about 30-35 million in lifetime earnings and stud fees (because you have to get to 20 million present value x 50% probability = 10million present value).
If those were accurate estimates (and I don\'t suggest that), then 8 million of for 75% equity is not that far off (depending on the return you expect, useful lifespan of the horse, etc.)
Though I am sure many here know how short-sellig works, You would have to \"borrow\" the horse, sell it, and buy it back later at a lower price, returning the horse and pocketing the difference. Hey, can I borrow your horse for a couple years?...
Leamas
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The rule of thumb for stallions starting in that range is 200 times stud fee, at least as of a few years ago (when I got paid based on it).
Your model depends on getting 150 mares a) to him and b) in foal-- that\'s a lot. Also, second and third year the actual (not listed) fee often goes down, until people see the runners.
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That\'s what derivatives are for. Like betting on horses you don\'t own in the Derby.
The actual market price in this \"business\" is almost always what the seller thinks his maximum result would be if he kept the horse. Which is why it\'s only right to buy horses that are somehow concealed (better than the public thinks they are).
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there have been deals the last few years that were far in excess of that equation for horses that are standing their first or second years now so maybe something changed in terms of how they are being valued or maybe those deals that I am talking about are the exception not the norm
again, you and others have much great knowledge on the topic than I do
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Probably not greater knowledge, it\'s been a while. Size of books and Southern Hemisphere may have changed the equation. Also, the multiple is lower for horses standing for less, and presumably higher the other way, because the relationship between expenses and revenue changes.
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That is why if the owner of Social Inclusion really was offered $8 million for 75% (still seems absolutely crazy that someone would offer that deal AND even crazier that the owner would turn it down) he should have taken the deal. He would be maximizing the value of the asset to the Nth degree while at the same time able to enjoy derby fever. (Seems like a dream situation to me).
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As a pure business decision doesn\'t make any sense. One issue, however was
that they would take the horse from the trainer. For a lot of owners it
is not all about the money and it is possible that the horse wont perform
for a different trainer. So if the horse is special and trainer is changed,
it could be a once in a lifetime opportunity down the tubes. I have seen as
an owner in my short time horses taken from my trainer that didn\'t run a
lick for a new barn. The flip situation has also happened. So although
economically it doesn\'t make sense, I can relate to the current owners thinking.
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I just read the owners of California Chrome turned down $6 million.
I am not sure how the SA Derby sets him up for a peak performance for the KY Derby but I have to admit the SA Derby being such a big race for west coast owners/trainer and his obvious liking for the track surface would be a tough one to pass. The alternative would be to pass this race and peak for the KY Derby (maybe the smarter move but what do I know?).
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From your lips (pass the race, peak for the big day), to Sherman\'s ears. Alas alas.
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According to Beyer, you are correct. Sanchez, the owner, insisted he keep a share in the horse (I am guessing 25%) and have Manny Azpurua continue the training. Oh, I almost forgot, the price for Social Inclusion was not $8 million but $15 million!
Now, he has turned down any offers until after the results of the Wood. I am a west coast guy and unfamiliar with Aqueduct but I hope there are no bridges nearby. Hard to root for folks associated with this kind of nonsense...