Pinhookers Look Ahead to Yearling Auctions

Many plan to rely on the same buying strategies and be careful.

Pinhookers made more money during this year’s five major select sales of 2-year-olds in training that were conducted by Barretts in California, Fasig-Tipton and the Ocala Breeders’ Sales Co. in Florida, and Keeneland in Kentucky. The rate of return (ROR) on their investment was 70%, which was up substantially from last year’s comparable result of only 30%.

But the ROR still wasn’t nearly as good as it has been in the recent past. It soared to 141% in 2004 and reached 116% in 2006. The number of horses sold for seven figures dropped to one from four in 2009.

Pinhookers looking ahead to this year’s yearling sales—from which they will acquire the stock they plan to resell at 2011’s juvenile auctions—said they weren’t planning to make many changes to their buying strategies. Many bought fewer young horses and spent less money in preparation for the 2010 sales of 2-year-olds in training, and they said they would continue to proceed with caution.

“We are gamblers at heart, and we’re always rolling the dice and hoping they come up the right way for us most of the time,” Eddie Woods said. “But we’ll be toddling in there carefully. There’s nothing that makes me want to bust open a yearling catalog at the moment. Our investors can all read and write, and they can see that the figures aren’t always adding up and that racing is in such a mess.”

Dean De Renzo of Hartley/De Renzo Thoroughbreds will be sticking to the same plan for buying yearlings to resell that he had in 2009.

“We shopped pretty hard looking for pedigree and racehorses, and if we had to give up anything at all, we may have given up a little prettiness,” he said. “We really have settled into buying pedigree and conformation. Price-wise, the market came back to us pretty good in 2009. We bought horses for about 20% cheaper than we normally would have, and we were willing to go to the same level that we would have the year before.”

Kevin McKathan of McKathan Bros. emphasized quality when buying yearlings last year and he will rely on the same strategy again during the 2010 round of yearling auctions.

“We changed our format a bit in 2009 and we were a lot more selective and bought the really good horses,” he said. “They’re not cheap to buy, but they’re easy to resell even though you might not make money on all of them. The people who are still shopping for 2-year-olds want to buy a really good horse. If you have a nice horse, there are plenty of people to buy it.”

Murray Smith won’t be altering her tried-and-true approach. She places less emphasis on pedigree than some of her fellow pinhookers who target the select juvenile auctions.

“I think you go in there and you purchase in whatever your comfort zone is,” she said. “My comfort zone is buying athletic horses, and I’ve never paid a whole lot of attention to pedigree and sire power. If you get lucky and a half sibling pops up and wins a graded stakes or a sire suddenly becomes hot, that’s great because you can improve the value of your horse significantly. At the end of the day, you’ve got to buy something you can live with—whether you sell it at the 2-year-old sales or you have to race it.”

Niall Brennan won’t be making any changes in his strategy either.

“We keep trucking along every year doing the same thing, and I don’t see that being any different,” he said. “It’s not just a job. We have a passion for the animals, so we’re going to keep doing it. There has been a stabilizing factor this year in the market, but we’re not going to see some big sign saying that it’s OK, all the bad news is over with, and we can jump right get right back into it again (in a major way). I think it will be a case of picking and choosing and being careful while we just keep playing the game.”