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One easy way of finding out the purchase price is to look online at the OBS/Keeneland/SAR sales sites. They list the purchase price (MOST of the times it's accurate...but they play games there too!). Then see what WPTB is selling the shares for! They have to charge such high markups and fees because of national TV advertising TVG, and other additional national sales staff and PR people, web page management etc. But I always find them to be great guys, honest and very caring to their owner/investors. |
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Given they aren't just marketing something to a few of their closest friends, in essence, they are offering an investment to the whole world via the web, print and TV. SEC regs have to come into play there somewhere. I thought about going global a few years ago and actually printed up about 10,000 fliers which I distributed at Pimlico on Black Eyed Susan Day and Preakness Day. Other than the fact that out of those 10,000 distributed, I got three emails and 5 hits on a web page I had set up, I backed off because my fears were raised about SEC intervention once I found out that the first partnership I was in had been investigated and fined by the AZ SEC. Given that so many of the partnerships out there charge a management fee, I guess I was a real idiot - I never charged my partners a dime in management fees. I bought my shares in each horse just like everyone else did and made my money off my share of ownership, just like the rest did. We all made the same or lost the same, based on percentage of ownership. |
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One person told me that technically they aren't "soliciting" and that's how they avoid registering, falling under securites guidelines, etc. I am not sure if that's true or if that's the case here. However, often there is disclaimer language that the advertisement, commercial, etc. is not a solicitation. Again, I don't know if that avoids any securites regulation or guidelines. Another partnership company CEO told me that he cannot solicit people and that people must put something in writing saying they are requesting information and are interested, etc. That was quite some time ago so I don't know if that standard still exists. Usually, when it comes to securities offerings and registrations, there are several benchmarks that must be met -- or avoided if you look at this from the opposite perspective, LOL. Eric |
Actually most of them put the standard securities disclaimer language ("this is not an offer to sell securities, past performance does not indicate future success, financial instruments run the risk of significant loss", etc.) into their advertisements and offerings.
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I have owned horses for about 30 years and I still enjoy it.
Storm Cadet has pointed out a number of good points especially about commercial partnerships. I had a friend that worked for one and he said almost all bills they presented to the partners had a 10% markup. So when you get the transportation bill or the shoeing bill etc it may be marked up. As for the sales, people should go to jail for what “some” of the partnerships do. I have seen cases where they buy a horse hours before the sale but still send it through the ring and bid it way up over value and then use that price to set up the partnership. Some trainers are known to do the same thing. So as always “buyer beware”. I would suggest starting out in a small local partnership. Find an honest trainer at a track near you. Ask people you know in racing a lot of questions about everything. Don’t invest too much until you get your feet wet and know the business a little. Early on I went through a number of questionable trainers. I was lucky, about 25 years ago I met a trainer who right off I knew cared about horses and people. We became friends and have been partners for over 20 years. Every owner I know will tell you the mistakes he/she has made. Don’t go into it thinking you are going to make money and work with someone who will keep you out of trouble with the IRS rules. Horseracing has very many highs and very many lows. I have read in this thread about people winning races and how great it is. You should also be aware of the lows, i.e. when you are standing there with a group of friends and your horse come in last. That being said there is nothing better than to see your horse cross the finish line first. It doesn’t matter if it is a $5000 claimer or the Gold Cup. I would highly recommend getting into the business. I have met many interesting people and have made a lot of friends. It is a great experience. Just as I said earlier though “Caveat emptor” Joe |
Guys: Here's an excellent article/transcript from Bloodhorse regarding ownership by Terry Finley of West Point TB. Great read: Great question and answer from the public!
http://www.bloodhorse.com/talkinhorses/TF071207.asp |
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Terry Finley's first answer in that chat is almost comical when he says that it "is very important ... to keep your distractions down at the sale and be as focused as possible." This coming from a guy who every time I saw him over four days at the Timonium yearling sale last fall was playing cards under the tent adjacent to the sales pavilion with bloodstock agents and pinhookers. |
It really is funny, the entire article is funny. The only part I like about it is the guys from Cleveland calling in, they are great guys.
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The most telling statement is where he says that "We do not take a position in the horses ourselves if we can help it." So basically, the West Point principals are participating in the horse business entirely with other people's money, with West Point incurring risk only if their rather large mark-ups fail to cover any unsold shares in the horses.
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Oh boy... I've been there. I've also been here. I haven't been everywhere. |
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Storm Cadet,
I fail to see your point. As the manager of a small upstate NY partnership, I find it much easier to recommend that people buy into a horse in which I already have a significant stake. It's one thing to say that their goal is to sell out all shares in all horses. Who doesn't want to do this? It's quite another thing to say that their goal is to sell out shares in horses in which they do not want to risk their own money. And they are clearly saying that they do not want to have any "skin in the game." |
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Personally I think it is tough enough break even in the game that paying twice as much for an animal than it was valued at auction just a short time prior is tough to swallow. On top of that they charge a maintainance fee and take money off the top of the earnings after a certain level. For each of the good stories (Flashy Bull, High Finance and Dream Rush) there are 5 not so good one's. But like I previously stated, if you are looking for the stuff that they are offering for the mark-up (whatever that might be when they call themselves the "Ritz Carlton of the Industry"), apparently they are your guys. |
Like Terry said, and I'm not endorsing West Point here, I left them years ago, is that some FOR PROFIT business models like his, Dogwood, Peachtree, Sovereign et al, do operate this way and they are very successfull with it.It's just another business model that they are comfortable with. It is NOT for everybody and they admit it!
I would love to start a stable and share like you do. We all split the risk! In fact a group of former CVF owners are trying to form their own with the main startup person holding 50% stake. |
I am envious..I am involved in a Racing Partnership where we can even get he Major Partner to give us the Financials.
Needless to say the experience has been less than fulfilling :mad: |
How envious can one be of a business outline that doubles the purchase price of a horse? You would think they were brokering diamonds or selling cars, to me its excessive
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C'mon on down! |
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I think many people brought up some great points here. What is important to remember is that every partnership, syndicate, whatever you want to call it -- is structured differently, meaning they have a different business model.
West Point doesn't take an interest in any of their horses -- so be it. That may be a good thing to some, and a bad thing to others. What it does mean is that they don't take an interest. You can look at it both ways -- yes, they don't have skin in the game, but there business is selling partnership interests, not owning horses. Just know it and understand it. On the other hand, I know people who don't have mark-ups, or take management fees, etc. They may run a small partnership and maintain an interest, and their selling point is "we have skin in the game" or "we invested our money right along side you" and so on. However, they might be selling a horse they already owned or one they bred 9who might not have gone through the ring). Therefore the price is what it is -- it's the price that the manager/owner/breeder/principal set the price at. Just know that going in. They might be looking to recoup investment dollars, diversify, spread risk, etc. There is a cost attached to that as well. All of the partnerships, syndicates, etc. have a business model. Most of them are in the business of selling partnership interests -- regardless of whether or not they maintain/retain an interest in the horse(s). It doesn't matter. Don't collapse "price" and "cost" -- know the full cost and be very aware of the entire landscape. Eric |
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