(Carl's Only Vice at OBS April 2012)                                                 (Long May You Run at OBS March 2013)

Another year of two year old in training sales are upon us! Here’s a review of the market at various venues from the past year, along with some thoughts about this year’s two year old auctions and where the best buying opportunities may lie..

With the Keeneland April sale cancelled in 2015 and not renewed this year, for all intents and purposes the two year old market is now centered in Florida, beginning with the Fasig-Tipton sale in South Florida on March 2^nd and continuing with sales in Ocala at OBS (Ocala Breeder’s Sales Company) in March and April. The two OBS sales between them now offer about 70% of all two year olds sold at public auction at major North American sales venues. However, the first significant sale of two year olds in 2016 is the boutique Fasig-Tipton Florida Two Year Olds in training sale, which was held for the first time at Gulfstream Park on March 4^th last year with 175 horses cataloged and will be held once again at Gulfstream this year with 151 horses cataloged but probably about 120 offered on sale day after pre-sale scratches. Traditionally this sale has been the place for buyers competing at the highest levels of the market to bid on the cream of the crop of two year olds offered at public auction, at least in terms of pedigrees. With a much more favorable location (Gulfstream Park is where most of the top horses, owners and trainers are in March), Fasig-Tipton Florida rebounded strongly in 2015 and re-established this sale as a venue to sell a horse that ticks all the boxes for the highest-end buyers in terms of pedigree, conformation, and fast workout times. Fasig-Tipton worked hard to bring buyers to their elite two year old sale last year and with a number of major graded stakes winners coming out of that sale including the champion two year old for 2015, the undefeated Nyquist who is the early favorite for this year’s Kentucky Derby, it’s likely that this year’s sale will be well attended and overall averages should hold steady and could even increase from last year.

Turning to the bellwether OBS (Ocala Breeders’ Sales Company) venues that as mentioned above have come to dominate the two year old market in recent years, the season will kick off with the March Select sale on March 15^th & 16th, then continue with the huge April sale on April 19-22nd and end with the June two year old and horses of racing age sale on June 14-17th.  Last year’s March sale was expanded with 422 horses offered (after outs) and 325 sold and despite the larger number of horses offered averages held up very well, with an average sale price of $170,000, a median price of $105,000, a top price of $1,400,000 and a total gross of $55,432,000  (all #s rounded). The average price in 2014 was a sale record $190,997 up 22.7% from 2013’s record $155,643. The 2014 median was a sale record $137,500, a ten percent increase over 2013’s sale record $125,000, so you can see that while the average and median numbers declined, 2015 held up well considering there were far more horses offered and sold. OBS March has cataloged 613 horses this year, almost the same as the 610 cataloged in 2015 (remember there are outs at every sale) and it looks like the averages will likely be similar to 2015 (a very strong year).

The OBS April sale catalogs about 1100 horses spread over 4 days with something for buyers in every price range and has become the equivalent to the bell weather Keeneland September sale for yearlings. In 2015 867 horses were offered (after outs) and 683 were sold. The average was $78,900, the median was $45,000 and the record highest priced horse sold for $1,900,000. The total gross was just under $54,000,000. In 2014, 767 horses grossed a record $57,032,000 compared with 815 horses sold for $48,757,000 in 2013. The average price was $74,357 in 2014, up 24.3% over 2013’s record $59,825 while the median increased to $47,000, 34.3% from the record $35,000 in 2013. Here again, 2015 numbers held up very well and 2016 promises more of the same. With the stock market and general economy not in bad shape but showing some soft spots in recent months, it’s difficult to envision significant increases at any of the two year old sales but the thoroughbred industry is stronger now (despite obvious structural issues) than it has been in the recent past and it looks like there’s enough money and buyers around to keep averages from declining significantly.

With the addition of a number of former April horses in the last few years, OBS June has gained traction as a sale where a nice horse can be found for people who are willing to accept less pedigree in return for not having to compete against the top end buyers who attend both the March and April sales at OBS. In 2015 OBS June offered 814 horses (after outs) and sold 616, with an average of just under $40,000, a median of $18,000 and a gross of $24,548,000 (all rounded).  In 2014, 706 two-year-olds sold for a sale record $22,498,300 in June, surpassing the 2013 Sale when 439 horses grossed a record $14,596,700. The average was $31,867 compared with $33,250 in 2013, while the median price held steady at $20,000. Much like with OBS March and April, the OBS June sale has held steady with very solid numbers.

The Fasig-Tipton Midtlantic sale held in Maryland May 23^rd and 24^th this year attracts owners who race throughout the east due to a convenient location and a number of prospects offered from various state bred programs. It’s a great sale to buy a New York, Pennsylvania or Maryland bred, and being located across the street from Michael’s, the best place for Crab cakes in the world, doesn’t hurt when it comes to enticing buyers! In 2015 325 horses were offered (again after outs) and 255 were sold, the gross was $22,660,000, the average was $88,850 and the median was 45,000. In  2014, 329 horses brought $19,601,000, an average of $59,578 and a median of $31,000, with 101 horses listed as not sold and a gross of $19,601,000, so Fasig-Tipton had a banner year with this sale in 2015! It will be a real achievement if they can maintain these averages in 2016 and a modest decline in numbers wouldn’t be unreasonable, but without question this sale has established itself as the one real alternative to traveling to Florida to purchase quality two year olds in training. Not detailed here are sales at Barretts in California, the Fasig-Tipton Texas sale, or any other regional two year old sales. Barretts & Fasig-Tipton Texas are basically sales for California - Texas based two year old buyers and while each sells some nice horses and fills a useful niche, a sheer lack of numbers make them secondary to the above detailed sales which have come to dominate the market.

Considering the above the question is, where might the best values lie if you are a buyer of two year old racing prospects and what should you be looking for at the sales?  As active buyers ourselves, we're not about to give away the secret sauce as it were, but in general the best approach is to attend multiple sales, do plenty of pre-sale research, have a good team in place (trainer, vets, bloodstock agent, short-lister, etc), a sensible budget, patience and perspective, and know what you are trying to accomplish. With around 3000 two year olds offered at various venues from March - June, there will be plenty of horses to choose from with sufficient pedigree power to give you a shot at coming up with a stakes quality horse. While the focus of this blog is the state of the two year old sales venues - market, clearly there’s a great deal that goes into to buying a good racehorse. Many people don’t realize that the mare is actually more important than the sire in terms of producing a good racehorse because while sire and dam each contribute 50% of the genetic material, the foal lives inside its mother’s body for 11 months; she’s the one who nurses it and teaches it all the important early life lessons. Beyond pedigree is the physical conformation of each individual horse and how it moves on the track. Finally just as with human athletes, there’s no way to know which horse has the heart and determination to make it in a highly-competitive sport.

For the past couple of decades savvy horsemen have decried the focus on ever faster workout times at two year old sales; a 1/8 mile breeze says little about the ability of a horse to run 6 furlongs (let alone 1&1/4 miles on Derby day) in a race. Fast times break down many young horses not mature enough to stand the stress of getting them to breeze in 10.0 seconds when many are not yet chronologically 2 years old. Any skilled horseman should be able to tell how well a horse moves by watching them in an untimed gallop, but buyers pay a premium for horses who post the fastest works. That can sometimes leave an opening for buyers willing to accept a horse who moves well on the track that works a few 5^ths of a second slower, as the same horse who works in 10.0 flat and brings $200,000 - $400,000 might well sell for less than $100,000 if they were to breeze in 10.3 or 10.4. Statistically there is surprisingly little difference in terms of racetrack results between the horses working bullets and those who work 3/5 of a second slower.

Since the handful of billionaires that hold up the sales averages at the elite auctions almost all concentrate on a few of the best-pedigreed prospects by the top 3 or 4 current sires who work the fastest or near fastest times, you frequently end up with a mispriced market where a horse that catches the attention of the 'right' people brings 600,000 (or a lot more), and one with 95% as much chance of winning a graded stake with just a little less pedigree or a fraction of a section slower workout time in the under tack show brings $50,000 - $100,000. Experienced and skilled horsemen-women are able to increase the odds of success by weeding out many horses at sales that may have pedigree and work 1/8^th of a mile quickly, but lack the physical attributes to stand up to training.  Every year, people buy a number of horses for $25,000 - $125,000 at public auction that win major stakes and are highly profitable. It's up to the buyer to come up with a plan to get to the winner’s circle without busting the budget!