Finding a good one. That’s what it’s all about at the yearling sales. Even when sales companies assemble the best-looking yearlings, you still know the gems are going to be hard to find. And even when you think you might be on to something you could easily be out bid by your competitors.
The clamour for the best prospects at the select yearling sales – particularly by the big battalions – can often send prices through the roof and leave us all wondering where the value for money lies. But in this industry what can be prohibitively expensive to one person often represents a bargain to another, such is the vast diversity in racehorse ownership.
We can all rest assured that the more we spend at the yearling sales, the more success we will have. The only problem is that this spending/success relationship is not a linear one.
To boost my success from the bottom of the ladder to the top – a 25-fold increase – I’ll need to spend over 300 times more money. But that has always been the way in most markets. Incremental gains come at a premium.
Answering the big question...
So, where are the sweet spots in the yearling market?
Well, assessing the Australasian yearling sales market from 2006 to 2017, for an average price of about $1.5 million you have a less than one-in-ten chance of finding a Group winner. And – believe it or not – that is the sweet spot.
Yearlings that sell for a million or more give you the best chance of finding a Group winner – a 9.35% chance to be precise.
Spend between $500k and a million and your chances drop by 30% or spend between $250k and $500k and they’re down by 58%.
Indeed, spend less that $10k and your likelihood of finding a Group winner is a mere 0.16%, or 25 times less than that for the millionaires.
The correlation between price and ability is also borne out by the average.
Timeform ratings for all horses that ran in Australia and New Zealand: the millionaires recording an average of 90.24 and the $10k and under a mere 60.99.
Top horses at every price
Whatever you spend at the yearling sales, there still remains a possibility – however slim – that you can pick up a high-class racehorse. Just look at the top Timeform-rated horses on our table. The best horse at each end – Wandjina and Polanski – are consider of equal merit by Timeform.
It’s also worth noting that of the 522 Group winners sold at auction in Australia and New Zealand since 2012, over half were sold for less than $100,000.
What is also apparent is the premium, or overspending, required to net a Group winner at the top end of the market.
The average purchase price of the 522 Group winners in the study was $184,056, which represents outstanding value for money. To buy a similar number of yearlings at the top of the market – the sweet spot – would have set you back $773,820 on average. Moreover, for that outlay only 6.6% of them would be Group winners!