Tacher, a True Jack of All Trades

There is not much Marc Tacher hasn't tried his hand at in the horse racing industry. The Puerto Rico native breeds, owns and buys horses; owns part of a racetrack; and pinhooks. He hopes to enjoy more success with the latter Wednesday as he sends three of his potential pinhooks through the ring at the Fasig-Tipton Gulfstream Sale.

Growing up in Puerto Rice, Tacher was bit by the racing bug at a young age and made his first investment in the game early in his adult years.

“I got into horse racing early. As a kid, I used to go to the track with my father,” said Tacher, who owns insurance companies around the U.S., but mainly in Miami. “When I was in my twenties I bought a piece of a horse and that is how I got started over 32 years ago.”

Tacher now has 85 horses in training in both Puerto Rico and the United States; operates a breeding program predominantly in his home country; and owns part of his local racetrack, Hipódromo Camarero.

“I kept on buying horses and, through the years, I was pretty successful at that,” said Tacher. “I raced mostly in Puerto Rico. The opportunity came to buy the racetrack in 2004, but it took like three years to get it done.”

Of all the things he does, Tacher enjoys racing the most.

“I have the biggest stable in Puerto Rico,” he said. “I have been leading owner there for the past five years. In the U.S., I am in second-place in victories in the nation and was third last year.”

Tacher continued, “I won the Puerto Rican Triple Crown, which was a nice experience to have. Not many people get to experience that, so that was a good feeling.”

Tacher has also done well with pinhooking. His biggest success in that venture, however, did not come at auction.

“My biggest score didn't go through the ring, but I sold a Distorted Humor colt for $1.5-million that I bought for $60,000,” Tacher said. “I mostly buy to pinhook, but through the months leading up to the juvenile sales, I can change my position or if the horse doesn't bring what I think he is worth, I keep him to race. I don't buy to race, to be honest, I buy to pinhook. Most of what I race are RNAs and I also buy at the 2-year-old sales.”

Three of Tacher's yearling purchases are set to sell Wednesday with de Meric Sales, who he has been using for the past three years. The first to go through the ring will be Hip 81, a filly from the first crop of Practical Joke. The $130,000 KEESEP purchase is out of a half-sister to MGSW Takeover Target (Harlan's Holiday) and SW Ladies' Privilege (Harlan's Holiday).

“She is a nice filly and very forward,” said Tristan de Meric. “These Practical Jokes are really training well and she is one we have liked all year. She is a balanced and good-looking filly.”

Tacher secured Hip 92, a son of last year's leading freshman sire Nyquist, for $155,000 at Keeneland September. The chestnut colt hails from the family of MGISW Diversify (Bellamy Road).

“He is a really nice colt with a lot of leg,” de Meric said. “He has been training very well and is horse we think could do really well at the sale.”

Rounding out the Tacher trio is a colt from the first crop of the late champion Arrogate (Hip 122). The $200,000 FTKOCT acquisition is out of MSW Hero's Amor (Street Hero), who is a full-sister to SW & MGSP Threefiveindia.

“He is a bit immature, but he is very quick and sharp,” Tacher said. “He is not as big as the Nyquist colt, but he is fast and looks like he should do well. He is a very refined colt.”

The Fasig-Tipton Gulfstream Sale will be held Wednesday at Gulfstream Park starting at 2 p.m. and the breeze show is Monday at 9 a.m.

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What To Look For In A Weanling-To-Yearling Pinhook, With BTE Stables’ Erin O’Keefe

On the surface, the goal of pinhooking is quite simple, to make money. Beyond that, I think everyone would agree that it's to make as much money as possible.

Each year prior to purchasing, I look at the pinhooking statistics from the previous year to see what the market trends are for the most profitable purchase point – by percentage, as well as dollars of profit.

It's great to double your money, but if you bought a horse for $5,000 and sold it for $10,000, it's unlikely you even covered your carry costs. On the opposite end of the spectrum, you'd love to make $60,000, but if you spent $400,000 and sold for $460,000 most of your “profit” is spent on commissions.

I seek to purchase in the sweet spot that's most likely to maximize actual profit. While a home run is a home run from any price point, it's key to mitigate risk as much as possible. Nobody anticipated the events of 2020, but a pragmatic approach allowed for profitable pinhooking.

To achieve these goals, certain compromises are sometimes required. If I'm looking to acquire a more physically precocious weanling, that likely means compromising on sire power. This formula can be successful, particularly when staying strict within a budget. Likewise, if I'm rounding out the group with a more commercial pedigree, that may mean compromising on something like size or vetting.

When narrowing from over 1,000 weanlings, the veterinarian you work with is key. A clear understanding of what can be helped, and what won't improve, allows for quick decisions and confident purchases.

Beyond the compromises that sometimes must be made, the main thing I look for is what I can improve.

In order to sell profitably, you must have done something to improve the “product” you're presenting. It's always a goal to have a pedigree update that improves the value, but those aspects are outside of your control as soon as the hammer falls and the horse is yours.

The physical improvement of the weanling to its yearling sale is a multifaceted process that can be influenced in many ways. At BTE Stables, we're fortunate to have resources to cater to the individual horse throughout the year it's with us prior to the yearling sale.

From a TheraPlate to a full spectrum of turnout sizes to individually-crafted feed protocols, we're able to craft care to allow for maximum improvement. From the time the weanlings set foot on the farm to the time they head to the sale, they are treated as individuals and assessed continually. The same horse will have a different outcome based on where it was raised and prepped, and that's something crucial to keep in mind during the selection process.

Erin O'Keefe is a partner in BTE Stables, in charge of farm management and bloodstock services. Originally from the suburbs of Detroit, Mich., she moved to Lexington, Ky. to attend the University of Kentucky's Equine Science and Management program. A lifelong fan of Thoroughbred racing, she immersed herself in the industry, working for many prestigious farms in the Bluegrass prior to launching BTE Stables in 2019 with partner Daniel Schmidt. Learn more about BTE Stables here.

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Juvenile Market Crash Not the Full Picture

Last year, an ongoing bull run in the North American bloodstock market carried the juvenile sector to a historic breakthrough. For the first time, aggregate turnover broke the $200 million barrier. The momentum felt so giddy that the next milestone, with the mean cost of a 2-year-old standing at $95,807, promised to be a six-figure average.

No market, of course, can sustain perennial growth. Capitalism requires recession to regenerate value. While these cycles will ideally be mild, this particular market is always especially exposed to any incipient weakness. Very often, it trades in animals that have already had to generate a profit for two sets of speculators: a commercial breeder, and a weanling-to-yearling pinhooker. With the raw materials becoming ever more expensive, then, the stakes for this third group had been rising precariously. Their record gross last year had been fed by a yearling market, in 2018, averaging nearly 30% more than had been the case only two years before.

And then, out of nowhere, the whole apparatus of the global economy was broadsided by COVID-19.

If these are indeed unprecedented times, at least in the postwar era, then there’s limited point in historic comparisons. But for what it’s worth, when the hammer came down on Hip 1114 at OBS last week, business for North American juveniles in 2020 was completed at $125,956,800, a drop of $77,374,900 or 38%; with the average down 24% to $72,389.

But never mind “comparing apples and pears.” This is like being trying to make sense of eviction from the most fertile and succulent orchard of Calvados, to harvest a few twisted, diseased stumps in a city backyard instead. The panic infecting vendors in the spring, as the Wall Street elevator went into nauseous reverse, was such that most would probably settle for maintaining three-quarters of the 2019 average as a pretty tolerable outcome.

The pandemic hit just as consignors were bringing their horses to a peak. OBS tottered bravely through its March Sale, but Fasig-Tipton called off its glamorous auction at Gulfstream; and Keeneland followed suit with its April catalog. By the time the sales companies had regrouped–improvising a summer market, deep into a curtailed juvenile program on the racetrack–many pragmatists had already staunched the flow by private deals with trusted clients.

So the most fundamental barrier to any coherent year-on-year comparison is the unknown volume of business conducted away from the sales ring. There was a 6.9% drop in the animals that even made a catalog, from 3,924 to 3,652. But there was also a significant rise among those who were entered for a sale but then scratched.

Even during the runaway bull run, of course, trade was ruthlessly predicated on a) a fast time and b) passing the vet. In the last two years, this endemic risk aversion had maintained catalog withdrawals at almost precisely 30%. This time, scratchings amounted to 37.45%. The net decline in the public market, then, amounted to 16.6%: 2,284 entering the ring, down from 2,740.

Among those that did so, moreover, only limited consolation can be drawn from a clearance rate that superficially held up very well-just a fraction down, at 76.18%, on 77.4% last year. For one thing, stable demand in a reduced pool equates to reduced demand. But the goalposts had also been moved so far that many vendors felt obliged to write off a project altogether; to cut losses by taking whatever was on offer. Their priority will simply have been to ride out this juddering bump in the road, and salvage enough capital to turn the overall slump to their advantage when, lean and mean, they open the next pinhooking cycle at the yearling sales.

Only four stallions made a seven-figure sale, compared with eight last year. Two of these were established heavy hitters, Quality Road and Uncle Mo; whereas the other pair, Not This Time and Speightster, were making headlines with their first crop.

Unmistakably, Not This Time was the market’s breakout achiever. He not only sold the most expensive 2-year-old of the year, a $1.35 million filly at the OBS “Spring” Sale, but maintained a $80,000 median and $175,216 average off a $15,000 opening fee.

As ever, stallions are grossly flattered by the exclusion of RNAs from their averages: rewarded, in effect, for failing to find a home for their weakest offerings. So a couple that deserve a mention for quiet, consistent merit this year are Flatter, who sold all but one of his 10 into the ring, for a $208,333 average and $170,000 median (crop foaled at $35,000); and Tapizar, who moved on six of seven at a $152,916 average and $100,000 median ($15,000 fee). Flatter’s dividends were broadly on a par with those he registered with this crop as yearlings ($198,088 average, $140,000 median); but Tapizar’s yearlings in 2019 traded at an average of $46,979 and a median of just $25,000.

That’s pinhooking gold.

But stallion performance, overall, is another area plainly distorted by all those private sales. Last year, for instance, Into Mischief sent 56 juveniles into the ring; Uncle Mo, 40; and American Pharoah, 37. This time round, these commercial big guns were respectively represented by 35, 14 and 21. On that basis, it seems safe to assume that a lot of the cream was skimmed off the farms around Ocala.

It will, no doubt, be a long way home. As the bull run kept up its breathless tempo, we often cautioned how the therapies employed after the 2008 financial crisis had been greedily maintained beyond the recovery. If nobody could have planned for the form taken by the next shock, then everyone knew that the system was being wilfully exposed. Painkillers were now being prescribed as recreational drugs. Sure enough, governments everywhere now find themselves with no choice but to make huge and perilous surgical interventions.

Another point worth brief reiteration: the wider recovery after 2008 was slow to percolate into the bloodstock market. Having lost 33.8% in 2008, the Dow Jones rebounded 18.8% the following year. It was a similar story with GDP: the entire 2.5% loss of 2009 was restored the following year.

North American bloodstock, in contrast, made consecutive losses between 2008 and 2010 of 21.2, 32.2 and 6.5%; and had to wait until 2013 to get back on an even keel.

And it’s hard to resist the sense that the environment, this time round, is much more hazardous. We’ve spent a decade pumping liquidity steroids into the global economy. The most affluent have had their gains topped up by tax breaks and deregulation. And, all round the world, these divisive economics have been “secured” by electoral populism. Those don’t look terribly solid foundations for the massive reconstruction required ahead.

On the other hand, we have to keep the faith. The best harvests tend to be sown than when a field has been most thoroughly harrowed. Returning to this specific market, you have to feel sorry for anyone who launched a business in the 2019-20 yearling-juvenile cycle. But history tells us that each “bust” invariably contains the seeds of the next “boom.” For anyone with the resources, audacity and skill to play a long game, this is the perfect moment to go into business.

It’s a more obviously propitious moment, of course, for those on the other side of the fence: the buyers. Trainers who have clung to viability will have picked up oven-ready runners at a bargain rate this spring. For bloodstock investors, equally, now is the time to find that stallion’s page; that foundation mare. And not just because prices are down. One of the latent dynamics of recession is that the guys who come out the other side will tend to be those with a worthwhile product. It’s the survival of the fittest. And those who have established their class through thick and thin, by reliably identifying and drawing out potential in a young Thoroughbred, won’t complain if they lose a few competitors who have simply jumped into their slipstream, during the boom years, thinking that the game is easy.

Who knows? Perhaps this crisis can even become a cue for everyone to be a little more grown-up about the stopwatch. Remember that the sector has matured, first and foremost, through the consummate horsemanship of consignors–many of whom feel increasingly uncomfortable about the commercial imperative of the “bullet” breeze. They are under ever more pressure to light a dangerous fuse in an animal that will never run so fast again. So if we lose a few who simply train young horses to sprint for :10 seconds flat, maybe that would be no bad thing.

Presumably the yearling market is about to endure similar travails, if not worse. Whereas the juvenile sector measures the appetite for immediate action, the rest of the sales calendar opens more patient cycles. But “correction,” across the board, is not just about inflated values. Maybe vendors, forced to think about what their brand should represent in the longer term, might actually realize that their own interests–like those of the breed itself–are better served by horses that can run; and not just horses that can sell.

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Consignor Arrested, Charged With Narcotic Possession With Intent To Distribute

John “Quincy” Adams, 51 of Morriston, Fla., was arrested in early June in Ocala and hit with multiple felony charges related to narcotics possession with intent to distribute. On the final day of the breeze show for the OBS Spring Sale of Two-Year-Olds in Training, Adams was pulled over as part of a traffic stop about five miles from the sale grounds.

According to a redacted police report provided to the Paulick Report this week, Ocala Police Department officers received consent to search Adams' truck, where they found one and a half pills Adams identified as Xanax, as well as a glass pipe and small baggies of various substances.

According to the report, Adams told the officers that he sells narcotics and that he does not have a valid prescription for Xanax.

Field tests conducted on the substances were positive for 2.5 grams of cocaine, 3 grams of crystal methamphetamine, and 1 gram of fentanyl.

Adams was charged with possession of drug paraphernalia, possession of controlled substance in a vehicle, possession of cocaine with intent to sell, possession of amphetamine with intent to sell, and possession of heroin with intent to sell, the latter four all being felonies. He was arraigned on the morning of July 7, according to Florida's digital database for the Marion County Circuit Court.

Adams has enjoyed success in the Thoroughbred auction market as a pinhooker, and began selling 2-year-olds under his Q Bar J Thoroughbreds banner in 2017.

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