Fourth-Crop Yearlings Offer Best ROI for Young Sires

re: Fourth-Crop Yearlings Offer Best ROI for Young Sires

Ian Tapp — Mon, 16 Sep 2013 13:11:03 GMT

Thank you, Sceptre. Nicole Sauer is also here so it will be a team effort.

Regarding the stallions used in the graphs above, they are--like you say--all successful stallions. So if a yearling buyer believes that a particular fourth-crop yearling sire is truly a successful sire (and not just a 1-crop wonder), then I think there's value in buying from the 4th crop. But that's the challenging thing to figure out...is the stallion legit or not.

re: Fourth-Crop Yearlings Offer Best ROI for Young Sires

sceptre — Sat, 14 Sep 2013 18:11:28 GMT

Hi Ian,

Firstly, congratulations on your new position. I'm sure you'll excel here as you did with TrueNicks.

Yes, I stand corrected. The higher prices for the 5th crop are probably more a function of better (dam) catalogue page than increased body of work by sire.

re: Fourth-Crop Yearlings Offer Best ROI for Young Sires

Ian Tapp — Sat, 14 Sep 2013 17:14:14 GMT

Sceptre,

Good point regarding the costs. These numbers don't factor in costs of production or training, which decrease the actual ROI for breeder and buyer.

The market seems to undervalue the "weak" 4th crop but is willing to pay a premium for the "better bred" 5th crop.

Does this mean that the market overpays for a big catalog page?

re: Fourth-Crop Yearlings Offer Best ROI for Young Sires

sceptre — Sat, 14 Sep 2013 16:42:28 GMT

Take a look at that graph for their 5th crops. For three of the four it demonstrated their worst return on investment. This suggests that we overpay for success...Also, you have restricted your sample to successful stallions. Imagine what the ROI would reveal had it included high initial stud fee failures, or those that became less successful...Lastly, (I) investment should include costs, not merely purchase price.