The Blood-Horse MarketWatch’s May issue includes a review of the select 2-year-olds in training season, which fared worse than expected with an overall drop in rate of return for pinhooked horses. The ROR fell to 30% from 82% in the 2008. Now these statistics apply only to pinhooked horses, meaning those purchased previously at public auction as yearlings with the intent of reselling them as juveniles. MarketWatch leans heavily on pinhooking statistics to analyze the markets for the most obvious reason — the commercial market tells us what a horse is worth on either end of the process. Pinhooks also make up a substantial segment of the market. In the case of the select 2-year-old sales, pinhooked horses made up 64.3% of the 882 horses offered.
While the market was down overall, there was one slender segment that significantly outperformed all the others. These were the pinhooks purchased as yearlings for less than $20,000. Of the 35 horses in this price range offered, 60% were sold (21 horses) and 43% (15) were profitable. This group generated a 120% ROR for its consignors, an increase from 63% for the same price range in 2008. The horses were slightly more expensive as yearlings, averaging $14,048 compared with an average of $13,000 for the comparable group of 2008. The average price for this price range as 2-year-olds, however, spiked 39.7% to $74,286, up from $53,176 a year ago.
Another significant change occurred with pinhooks purchased in the $50,000-$74,999 yearling price range. The ROR for this group fell to 6% from 112% during the 2008 select seasons. The average 2-year-old price for this segment of the market dropped nearly 50% to $86,553 from $172,045 a year ago.
What happened with these two segments of the market may be related. Among the eight yearling price ranges MarketWatch uses to analyze the market, RORs were the highest for the bottom three — pinhooked horses that sold for $39,999 or less as yearlings. Buyers clearly had less money to spend and were shopping for bargains. This means less interest at the top and upper-middle segments of the market and more interest in the less expensive horses. More interest means more competition, which generally means higher prices. — Eric Mitchell