Robert LaPenta offers many of his yearlings at auction.

Robert LaPenta offers many of his yearlings at auction.

Anne M. Eberhardt

Pinhookers Will Be More Cautious

They plan to buy fewer yearlings in 2009 to resell as 2-year-olds.

With prices tumbling at the early select sales of 2-year-olds in training, pinhookers, who provide most of the stock for the auctions, already are thinking about how they are going to approach their next buying-and-selling cycle. It’s not good news for yearling consignors because, in general, pinhookers plan to be much less aggressive when buying young horses later this year.

“There is a lot of caution,” said Carl Bowling of Straightaway Farm. “I’m in the mortgage business privately, and I lend money. In the last two months, I’ve foreclosed on four different pieces of property. I now own them, and instead getting income from them, I’m having to pay taxes and insurance. So if things have changed for me – and I’ve been hustling and working for 68 years – it’s changed for a lot of people.”

Looking ahead to the yearling sales, Bowling said:  “No way am I going to purchase horses for the same as I did in the past because I won’t be able to sell them for the same (as 2-year-olds) as I did in the past. I’ll be buying cautiously. I won’t purchase 10 or 15; I’ll purchase three or four.”

Robert LaPenta offers the yearlings he buys at juvenile auctions, and then races the ones he buys back. He has never been shy about taking horses home when they don’t bring the prices he expects.

“We’re trying to be smart about what we do,” he said. “We love racing, and we’re going to stay involved. But maybe we’re going to switch things around a little bit and not buy as many yearlings. We might actually look to buy some nice horses at the 2-year-olds sales because the prices are way down.”

In addition to selling an Unbridled's Song–Rubywood colt for $1 million (through Scanlon Training Center) at the Fasig-Tipton Florida select sale of 2-year-olds in training, LaPenta purchased a $75,000 Vindication–Rose Frances colt for $75,000.

According to another pinhooker, Nick de Meric, “There’s no real way to predict what you’re going to do until you know how you’re going to end up this year.” But, he added: “I think it would be fair to say that none of us are likely to have a great year. If we can survive the process, keep the majority of our powder dry, and be in position to play again, we’ll buy carefully, something we always have done to a degree.

“It’s almost a given that the yearling market is going to be a little softer,” de Meric continued, “and I would like to be in a position to buy horses that, in other years, I would not have been able to afford. That would be the best case scenario for me. But having said that, if we take it in the gut, then it may be harder to get investors to ‘re-up’ for next year, and that could make a big dent in our spending power.”