Kitty Taylor of Warrendale Sales always is a little apprehensive before the first auction of the yearling selling season because nobody knows exactly what the market is going to do. But this year, with the American economy in the midst of a steep downturn, there are more butterflies fluttering in her stomach than usual heading into the Fasig-Tipton Kentucky July select yearling auction.
While watching a television report on Wall Street the morning of July 12, “I was thinking, ‘I need to pop a Valium before I go out to Fasig-Tipton,’ ” Taylor said. “The economic picture has got everybody anxious. I’ve just told all my clients, ‘Let’s be very realistic with our reserves unless you want to go on and race or go to a 2-year-old sale.' ”
But all hasn’t been doom and gloom.
“There are good horses here, and we were very, very busy yesterday,” Taylor said. “We were slammed to the point that we had grooms on shanks; we didn’t have enough card people; and we were showing horses everywhere.”
Just about every other consignor interviewed agreed with Taylor, reporting that the early interest from prospective buyers had been high heading into the auction, which will be held in Central Kentucky July 14 and 15.
“We’ve been very pleased with the strong turnout so far,” said Pat Costello of Paramount Sales. “Yesterday, we had 537 shows. Last year, on Friday, we only had about a half-dozen (shows). People seem to be getting busy early, and that’s encouraging.”
Yearling-to-juvenile pinhookers, who usually shop enthusiastically at the Fasig-Tipton Kentucky sale were out in force. They included Ciaran Dunne of Wavertee Stables, Tony Bowling, David McKathan, Niall Brennan, and Nick de Meric.
Based on the rate of return on investment, profits improved for pinhookers earlier this year at the five major select juvenile auctions in California, Florida, and Kentucky.
“I can’t talk about the mood of pinhookers in general, but I can tell you the mood of this pinhooker and it’s he doesn’t know how to do anything else, so he’s stuck with this,” de Meric said. “I stayed alive this year, and that was good enough to keep me going. As long as I’m here, I’m going to play. I can’t go home empty-handed.”
Because of the weak Ameican dollar, buyers from many foreign countries have a financial advantage. British bloodstock agent Hugo Merry is shopping at the Fasig-Tipton Kentucky auction for the first time, but he said the exchange rate really wasn’t the reason why he had journeyed to Kentucky.
“There have been successful graduates out of this particular sale,” Merry explained. “I have two clients, and they like American sires because they’ve done very well in Europe. If the horses we buy are any good, we can send them back to America (to race or sell privately).”
Even though the news about the health of the American economy isn’t good and there are money-related problems elsewhere in the world, the situation is far from bleak when it comes to the yearling market, according to Merry.
“There are a lot of places with a lot of money still,” he said. “There is more money in more hands than ever before. While there is a credit crunch, we’re finding. at the same time, that we’re very busy. We’ve gotten business from India, South America, Australia, and even from America. There are a lot of people who are recession-proof in the world nowadays, so I’m very optimistic.
The Kentucky July sale will be the first auction that Fasig-Tipton has conducted since it was sold to Dubai-based Synergy Investments. The transaction was finalized May 30 and since then, Fasig-Tipton’s staff has remained the same and its executives have maintained there won’t be any major changes any time soon.
“I think we’ve got a nice group of yearlings, and the early feedback from buyers is that the physicals of the horses overall are good,” said Boyd Browning, Fasig-Tipton’s vice president and chief operating officer. “I don’t think we’re going to see a ton of new money or new players. For the most part, we’re going to see the same old faces, and I think we’ll have a market that was similar to last year’s.”
In 2007, the 354 horses sold grossed $36,441,000, which represented a 2.4% increase over the previous year’s comparable figure. The average price fell 11.2% to $102,941 while median price declined 11.1% to $80,000. The buy-back rate rose to 32.1% from 24.6% in 2006.
This year, there are several improvements in the Fasig-Tipton barn area. The company planted “hundreds” of trees, according to Browning, and put new televisions in the barns. The sound system also has been upgraded.
But the work was completed or planned before the new ownership took over, Browning said.
“We always try to make improvements,” he added.
Selling at Fasig-Tipton will begin each day at 10 a.m. (EDT).
Following is what some other people had to say about the auction’s prospects:
Francis Vanlangendonck, Summerfield: “It’s business as usual. We’ve got plenty of people here, and they’re shopping like they always have. The pinhookers made money last year, and I think the enthusiasm of the industry is going to supersede any kind of economic downfall. People love racing; they enjoy it.”
Kerry Cauthen, Four Star Sales: “I’m cautiously optimistic. The traffic here is good. The right people are here -- all the pinhookers, and you’re starting to see some of the trainers and the other racing buyers come in. They all seem positive, and I’m just a mirror of their good vibe. I think people just feel like there are good horses here, and they seem to be in the mood to buy.”
Neil Howard, Gainesway: I think there is a little bit of apprehension based on the overall economy in the nation, but I know the traffic was good yesterday. There were a lot of people out here looking, and we were really busy, so that was encouraging.”
Mark Taylor, Taylor Made Sales Agency: “I have realistic expectations. I think it’s going to be a good sale. The accelerated depreciation is going to help quite a bit. I’ve been pleasantly surprised early to see that there are some Europeans floating around, and maybe we’re going to get a little help from them when I didn’t think we were going to get any. A little bit of help is better than nothing.”