Our friends at Two Year Old Sales Watch had an interesting column July 30th titled "The Two-Year Old Money Pit", which we thought was worth discussing. While a lot of sales companies and consignors may not like what they are saying, the numbers don't lie. As shown in many of our own previous Blog posts, paying top dollar and/or buying horses with the fastest work times simply doesn’t pay off the vast majority of the time. Sales companies, sellers and agents don’t want people to know the facts because their business depends to a great extent on convincing uneducated people to overpay for unproven racing prospects. 

What are the lessons to be learned from the facts below? Clearly, paying hundreds of thousands let alone millions of dollars for any horse rarely pays off because the economics of the industry don't support it. There simply isn't enough purse money to pay back the investment. But there’s another path that can lead to genuine success for savvy buyers. Every year a majority of the stakes winners sold publically are purchased for $20,000 - $150,000. Horses purchased at that price point not only win most of the stakes, many of them make money for their owners, or at least pay their way. The reality is, most horses, like most human athletes, aren’t going to make it at the top levels of the sport they compete in. Only a tiny handful of people make it to the big leagues in any sport and only about 3% of all horses ever win a stake race in their lifetime. If you pay the kind of prices people regularly spend in the examples below, you are virtually guaranteed to lose money, even if you do come up with a ‘good horse’. If you work within a rational budget you have a shot for genuine success and if you find the ‘big horse’ owners dream of you are in a posistion to make serious money, in addition to enjoying the thrill of a lifetime. It's time our industry focused more on educating buyers about the facts, as the article below does. It would be a lot tougher for people like Kenwood to have more competition at the sales if wealthy owners started spending $1,000,000 to buy 10 $100,000 horses than one sales topper, but we’d have a lot fewer disillusioned new owners and a lot healthier industry to show for it. 

See highlighted excerpt from the article: