Pinhooking for a hobby?/More profitable?
Moderators: Roguelet, WaveMaster, madelyn
I'm with Foggy here. There are more "carpetbaggers" in the horse trade than there are in ANY regulated trade. Just look at the lawsuits over undisclosed commissions, back dealing, etc., and that is the teeniest tiniest tip of the iceberg. It's a business where you need to walk around with your hand ON your wallet, watch everyone like a hawk, and choose your associates more carefully than you would select your daughter's first date.
So Run for the Roses, as fast as you can.....
i agree 100% with Madelyn. Also, what makes the game even more tough is the fact that more than 50% of the horses are not profitable. So when that nice moment comes on whether you decide to leave the horse auctioned loosing some money or you decide to take it back to race, the odds are always against you.
However, if you hit a couple of home runs you will be very satisfied.
However, if you hit a couple of home runs you will be very satisfied.
Bill
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Sock Monkey
- Allowance Winner
- Posts: 353
- Joined: Tue Sep 25, 2007 8:07 am
Plus, this industry is so subjective it can be hard to tell how honest someone is being. When it comes to a horse, it's difficult to find a really good comp - unlike with real estate, a car, etc. - because there are more variables with horses. Similarly, it can be hard to evaluate how good of a job a trainer, agent, etc. are doing - especially when dealing with one or two horses - because there are so many variables and horses are living creatures that can change from day to day. It makes it tougher for the investor and easier for the dishonest to take advantage than in a lot of other businesses.
Sock Monkey has a good point.. how much is a horse worth?
To attempt to try to understand (and maybe avoid some pitfall deals), I took a course a few years ago to become a certified Equine Appraiser. While it is an imprecise science at best, it has sure helped me out!! But it takes hours or days of research to accurately value a horse, so I only do it for $$ or my own horses
There are some, though, that you can thumbnail and get within 10%. I will say this. I believe wholeheartedly that I have not overpaid for a horse. In a LOT of cases, I have paid the asking or auction price which was a 10% or less of the actual worth of the horse. I felt no compulsion to pay more, and was not plagued by guilt 
To attempt to try to understand (and maybe avoid some pitfall deals), I took a course a few years ago to become a certified Equine Appraiser. While it is an imprecise science at best, it has sure helped me out!! But it takes hours or days of research to accurately value a horse, so I only do it for $$ or my own horses
There are some, though, that you can thumbnail and get within 10%. I will say this. I believe wholeheartedly that I have not overpaid for a horse. In a LOT of cases, I have paid the asking or auction price which was a 10% or less of the actual worth of the horse. I felt no compulsion to pay more, and was not plagued by guilt So Run for the Roses, as fast as you can.....
Here is a for instance.
I selected a horse and negotiated a contract around 475k. The horse was passed on, subsequently purchased by the same entity that called me looking for a horse for double. The horse is now being sold to Dubai for obscene money. Guess how much the original buyers are willing to pay me, mind you this is 5 months after the fact, 2k! They said because I issued them a "consultation" bill its considered the entire bill. They asked me to send them a small invoice to get the ball rolling, just a consultation fee to be followed by a commission fee. I sent the consultation, and commission and they choose what they pay. Mind you these guys have won a G1 with the horse, G1 placed, etc. Its just this business, things that happen in this business do not happen in real life. If you deal with anyone, regardless of how big they are, what their name is, you have to keep your belt on tight.
Now I have dealt with guys who shake my hand and say deal and it goes down exactly how its supposed to. Thats how I am, but for the most part you need to be very careful. No this isnt a business like the stock market.
I selected a horse and negotiated a contract around 475k. The horse was passed on, subsequently purchased by the same entity that called me looking for a horse for double. The horse is now being sold to Dubai for obscene money. Guess how much the original buyers are willing to pay me, mind you this is 5 months after the fact, 2k! They said because I issued them a "consultation" bill its considered the entire bill. They asked me to send them a small invoice to get the ball rolling, just a consultation fee to be followed by a commission fee. I sent the consultation, and commission and they choose what they pay. Mind you these guys have won a G1 with the horse, G1 placed, etc. Its just this business, things that happen in this business do not happen in real life. If you deal with anyone, regardless of how big they are, what their name is, you have to keep your belt on tight.
Now I have dealt with guys who shake my hand and say deal and it goes down exactly how its supposed to. Thats how I am, but for the most part you need to be very careful. No this isnt a business like the stock market.
I've only pinhooked once, we paid $1,700 for a weanling in Dec of 2004 and sold her for $13,000 in Oct of 2005. We don't have a farm, so we only made a profit of 5k after expenses ( including % to consignor ). All in all our CPA was very impressed.
She was resold as a 2yr old, has won 3 out of 5 races. Is not a GrI winner, is running really cheap, but for the price she's doing ok.
winds
She was resold as a 2yr old, has won 3 out of 5 races. Is not a GrI winner, is running really cheap, but for the price she's doing ok.
winds
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bdw0617
- Darley line
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- Joined: Thu May 03, 2007 10:19 pm
- Location: Los Angeles, CA
- Contact:
90% of all businesses fail.
most businesses fail because the people who run the businesses lack persistence. it's true most people are quitters and take the easy way out. This is nothing new, which is why about 10 percent of \businesses take in about 90 percent of the revenue.
I believe the major reason everyone is not successful in their lives is because most people quit as soon as the road gets tough.
While horse racing is in fact a very unique business with it's own unique set of problems, I assure you getting "burned" is not one of those unique problems. there are scam artists in every business looking to take advantage of people with a dream.
I remember in I want to say 2003, very early 2003 when I had just started my company with my business partner, we wanted to hit the ground running so we put out a prospectus and tried to gain some venture capital. And we had some interested parties. Interested enough to want us to fly out there to see what we had to say. While trying to set this up with this west coast venture capital company, we ran into a woman from las vegas who could get our names out to thousands of investors for X amount of money, which was used to print the prospectus and used to ship them out. it was a dream come true. only thing is it was $4,000 to ship them. We pinched pennies for about a month and somehow we actually came up with $4,000, paid it and never heard from the woman again.
2 months later a guy from jacksonville florida would help us out, or said he would at least. this time we got smart and did about as detailed a research on the guy as we could, nothing of interest came up. instead of money he wanted a "nice computer" in excahnge for his services which was to intorduce us to his team of angel investors to help us out. that was a bad computer, I remember building it. Shipped out out, overnight no less and again.. poof.
yeah we got skimmed over. i have so many stories i could make your head spin. Merchant accounts holding thousands of dollars and telling the customers that we have their money when we don't, magazine companies who charge you 5 times more than what they said they were going to, a real estate agent who takes a deposit for a building and then gives it to someone else. HOrse racing doesn't have a monopoly on swinddlers I promise you.
But each time something came up like that we got smarter. we never blamed the other people, that's easy. what's hard is to look in the mirror and say, hey what could I have done to see what was going on. how can i make better decisions. how can I handle this situation better than i handled it. and every time, this goes for everything in life, there is usually something that you could have done better to prevent those issues.
I don't think horse racing is any different. I think it goes back to the first part of this post, Never confuse a single defeat with a final defeat. you get knocked back on your heals, look back, learn what you can from it, plan out what you will do differently and be persistent. i hate to talk in generalities like that but it's true.
most businesses fail because the people who run the businesses lack persistence. it's true most people are quitters and take the easy way out. This is nothing new, which is why about 10 percent of \businesses take in about 90 percent of the revenue.
I believe the major reason everyone is not successful in their lives is because most people quit as soon as the road gets tough.
While horse racing is in fact a very unique business with it's own unique set of problems, I assure you getting "burned" is not one of those unique problems. there are scam artists in every business looking to take advantage of people with a dream.
I remember in I want to say 2003, very early 2003 when I had just started my company with my business partner, we wanted to hit the ground running so we put out a prospectus and tried to gain some venture capital. And we had some interested parties. Interested enough to want us to fly out there to see what we had to say. While trying to set this up with this west coast venture capital company, we ran into a woman from las vegas who could get our names out to thousands of investors for X amount of money, which was used to print the prospectus and used to ship them out. it was a dream come true. only thing is it was $4,000 to ship them. We pinched pennies for about a month and somehow we actually came up with $4,000, paid it and never heard from the woman again.
2 months later a guy from jacksonville florida would help us out, or said he would at least. this time we got smart and did about as detailed a research on the guy as we could, nothing of interest came up. instead of money he wanted a "nice computer" in excahnge for his services which was to intorduce us to his team of angel investors to help us out. that was a bad computer, I remember building it. Shipped out out, overnight no less and again.. poof.
yeah we got skimmed over. i have so many stories i could make your head spin. Merchant accounts holding thousands of dollars and telling the customers that we have their money when we don't, magazine companies who charge you 5 times more than what they said they were going to, a real estate agent who takes a deposit for a building and then gives it to someone else. HOrse racing doesn't have a monopoly on swinddlers I promise you.
But each time something came up like that we got smarter. we never blamed the other people, that's easy. what's hard is to look in the mirror and say, hey what could I have done to see what was going on. how can i make better decisions. how can I handle this situation better than i handled it. and every time, this goes for everything in life, there is usually something that you could have done better to prevent those issues.
I don't think horse racing is any different. I think it goes back to the first part of this post, Never confuse a single defeat with a final defeat. you get knocked back on your heals, look back, learn what you can from it, plan out what you will do differently and be persistent. i hate to talk in generalities like that but it's true.
"When the solution is simple, God is answering.”
- Einstein
- Einstein
bdw, for once your words of wisdom ring true!!! I have always told people about the racing game,"it's not can you get into the business but, can you stay in the business. As you so sucinctly stated, most people give up after one bump in the road.
I heard the racing game described perfectly once and have never forgotten it, horseracing is 90% disappointment and 10 % surprise.
I heard the racing game described perfectly once and have never forgotten it, horseracing is 90% disappointment and 10 % surprise.
BDW
Im going to make a prediction. I predict if you ever get into this game your pants will quickly be removed and you will wish you were back in computers, or whatever it is you do. Do not make the same mistake many others have made thinking this business is like real estate, computers, or whatever other business you are familiar with. I can assure you its not like anything you have ever been involved with.
Im going to make a prediction. I predict if you ever get into this game your pants will quickly be removed and you will wish you were back in computers, or whatever it is you do. Do not make the same mistake many others have made thinking this business is like real estate, computers, or whatever other business you are familiar with. I can assure you its not like anything you have ever been involved with.