Only those who paid the ridiculous prices "chasing the market" could make outlandish comments that it was a "buyers market" as they try defend the indefensible. The prices on Day 1 of the 2012 Magic Millions Yearling Sales for horses that did actually pass physical and genetic evaluations were way up on the past 2 years sales.
No doubt the top end was retreating as the depressed state of the economy took away the big boys play money however it also had to be appreciated that the top end horses by the big sires overall did not match up on type with their pedigree page. The buyers were there for them but the horses let them down at the top of the market.
The fact is that on Day 1 the average was down 5% but signalling the strength of the market the median price was up over 5% to a massive $100,000. On day 1 in 2011 the top price was $850,000 however in 2012 it was only $450,000. The gems of the sale on Day 1 were in the second tier yearlings but that market was so hot that only the brave (or irresponsible) got set.
It was that strong and buyers in our opinion paid far too much.
The sale catalogue was soft for a Day 1 MM premier sale on pedigree pages and quality types but does strengthen up nicely from Day 2. Yet with that being the case, the median price was up to $100,000. Certainly there were a handful of attractive yearlings Day 1but they were all well found by the professional buyers and these lots were selling way above their market expectations.
As a professional buyer and Bloodstock Valuer, we know the true market value of each yearling on offer. So when we bid on 6 yearlings to their true ceiling prices, only to miss out by not $10,000 but more like $60,000 - $80,000 per lot, the world's gone mad !
There is a simple philosophy in this business. To survive you must be diligent and take a hard line on valuations and never chase a horse. Let's face it ! They are like busses, miss this one and 5 minutes later the next one arrives. That's how it is. If you pay overs, the client who buys a share has a reduced opportunity of getting an acceptable return on investment.
Naturally we are disappointed not to have purchased on Day 1 however to be fair, we have another 41 quality yearlings to bid on over the next 3 days that have passed full veterinary inspection, so we remain confident we shall achieve our yearling quota.
We are certainly comfortable with our position of due diligence and know our clients are the winners by our deliberate decision to refuse to chase the market upwards.
As for any suggestion it was a "buyers market" on Day 1, those who make such claims are spinning a yarn and most likely believe in fairies at the bottom of the garden. There were no sale ring bargains Day 1. The top end was depressed because the horses missed the mark. That reduced the average slightly but when that happens and the median rises its a strong market. Reality will bite when those who have paid overs on Day 1 write and sign their cheques !
How the day unfolded:
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Our first yearling we valued at $100,000 - Sold for $180,000
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Our second yearling we valued at $90,000 - Sold for $170,000
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Our third yearling we valued at $85,000 - Sold for $150,000
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Our fourth yearling we valued at $120,000 - Sold for $140,000
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Our fifth yearling we valued at $120,000 - Sold for $140,000
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Our sixth yearling we valued at $90,000 - Sold for $170,000
We hope Day 2 is more realistic and reflects market fundamentals ! Otherwise we will be empty again at the close of Day 2 !
Stay Tuned !!!