New blood at TBA South Africa

Craig Eudey Wrote:

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> JD, tell me why when we are at a sale we have to
> waste our time looking at horses that 9/10 times
> will be taken home because the reserve is too
> high? My idea is they can have brackets where the
> seller says this is say an A) Horses with reserve
> above R1000000, B ) R500000 C) R250000 D)R100000
> E) R50000. They can then start the bidding at
> R900000 for an A yearling and the seller who
> should be behind the rostrum can change his mind
> and say yes if he only gets 1 bid or the non sale
> is over in a minute. Finished and klaar. Stop this
> waste of time where the bidding eventually starts
> at R20000 after the auctioneer asks for R200000
> and ends up possibly getting sold or bought back
> for R650000 or more. The sale could be over far
> quicker and everyone knows where to look and can
> decide on what he has a chance of getting or not.
> Just because the seller might say he thinks the
> horse is a D does not mean it cannot go for
> R500000+ if 2 bidders like it.

Craig, the seller might as well say why doesn't the buyer write on a piece of paper what he is prepared to pay and is bound to pay it if it is accepted.

Surely I have every right to take my property home if I can't sell it? Surely I have a right to decide at what price I won't sell. If there is no reserve, surely I have the right to buy it back?

My question for you, if you had to put up a nice horse for sale after the races, but no reserve, would you let it go any price or would you have someone there to cover just in case? What would you do if you were in for 200k and the highest bid was 40K? If you would take 180K but was hoping for 300K, would you advertise that you would take 180K? All of this is followed by "are you an idiot?". People at auctions are not you friends, they are in predator mode...quite right too.

Sometimes I have got more for a horse than I thought. The reasons can be many. I was told that before Model Man put foot on the track, all the Elliodors was snapped up by a few in the know. It's probably a urban legend but not inconceivable. One of the first horses I ever sold I got several times more than what I expected. I am sure if I had disclosed my reserve, I would have "valued"the horse publicly and shot myself in the foot. My reserve price has always been my "disaster" price, and it's often less than what that horse has cost me.

A shrew buyer does not tip his hand, why should a seller and how can you insist?

Very recently a friend got very much more than expected because a few proper buyers found the horse. He got a very pleasant shock when the horse sold well. Disclosing his reserve could NEVER have helped. I hope you guys who brainstormed this can do it when it's your turn at auction. Seer if worrying about how much time you wasting will concern you then.

Still waiting for a single example of where this works?

PS as for those numbers Craig, surely you know if a horse is might have a 50K vs 250K reserve, just the stallion fee would be a guide. Perhaps buyers can also stop trying to be so clever bidding for Jet Masters with 5K bids starting at 10K, thats also as fun as watching paint dry. But bidders are entitled to try get the horse for as little as possible, while sellers try the opposite, I don't see the problem.

www.dnw.co.uk/medals/auctionarchive/sear...lasso?date=15+Dec+11

i'm not sure if this would help you Jack but look at the link above - the estimates are printed before the auction is due (not a reserve but an estimate) If you put up a horse without reserve and then when it's price is too low you put in a bid using a shill bidder you are acting in bad faith.

I think this thead started by asking how the TBA could improve and get more people to the auctions. All we have seen is the sellers and big players slate what would help the bottom of the pyramid which props it up in the 1st place. Do you guys that are having a go at what I am writing think that these are only my ideas and no one elses? No wonder the buyers going to the auctions are dwindling.

Craig Eudey Wrote:

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> I think this thead started by asking how the TBA
> could improve and get more people to the auctions.
> All we have seen is the sellers and big players
> slate what would help the bottom of the pyramid
> which props it up in the 1st place. Do you guys
> that are having a go at what I am writing think
> that these are only my ideas and no one elses? No
> wonder the buyers going to the auctions are
> dwindling.


craig if you were a bloodstock agent buying to put syndicates together the last thing you would want is the sellers to make known their reserves...makes u think doesnt it...

i have the question for jack dash. if you buy your horse back from the auction do you pay the VAT and commission?

What is the saying Pirates? English never my favourite subject but something like they doth protest too much or close too it. It obviously does not suit some people to go with what the smaller people would like and have approximate reserves printed. I know what has been given as the reasons but that does not cut with us. I am sure the eventual owner would also like to see what the reserve was for the horse he bought was. We trainers are asked to be transparent with how our horses are working for the public so why cannot the sellers be the same. Transparency in racing is what we all want is it not? We race on the Sunday, the second day of the National sales and most trainers will sprint up on Thursday or Friday morning and I for 1 would like to watch that work. It does not leave me and most guys a lot of time to get there and look at all the horses so our ideas would help most buyers. Some trainers do not even bother to go as they feel it is not worthwhile in spite of flights and accomodation being offered to be paid.The perception is they are catering for the elite and dont need the smaller guy. The elite can buy what they want anyway so why should they worry.Pirates sometimes we agree.-D

Flash Harry Wrote:

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> i have the question for jack dash. if you buy your
> horse back from the auction do you pay the VAT and
> commission?

The auctioneer will bill you for the commission on the selling price or the reserve price, plus whatever other sales fees, all plus vat.
As for the vat on the price, as a seller and buyer, the vat goes and and out in your books and cancels I would guess. If you are not registered for vat, then the horse will be sold and declared as non vatable.

Out of interest, a friend who had a small farm and bred horses and raced them, got into such a row with SARS that in the end they agreed that he would take the horses he bred from his pty ltd farm and buy them back on auction to establish a value. Needless to say, it was.a road to disaster because the horses sold below cost and his farm became a suspicious business or something like that.

i think there is the achiles heel for breeders who do buy back. if the "scecond best" bid gets the horse then the full vat is paid i think? if i was sars i would have problem with this

Flash Harry Wrote:

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> i think there is the achiles heel for breeders who
> do buy back. if the "scecond best" bid gets the
> horse then the full vat is paid i think? if i was
> sars i would have problem with this

I can't see why? The system is called VAT, value added tax. If you sell something, you generate a vat invoice. if you bought something, you receive a vat invoice. The tax the receiver collects is on the value you added. If you sell something for the same price you bought it, your calculation is zero vat. If you are silly enough to buy something you are selling, you will issue and receive the same invoice.


Although I give up on this. My last word on this is to call it as it really is:
All these auction threads are about the same thing. The moaners & groaners (or whiners as someone called them earlier) want to buy, want a system that is not only totally in their favour, but one that traps a seller into being forced to take a loss. (we are talking about reserve prices..and 99% of reserve prices are seen to be very fair on every sale sheet, AND maybe to 1 or 2% where things don't look so cool and the buyer, umm, lost their minds?)

We zing to & fro, but that's the bottom line. It is refreshing though, that experienced buyers like Team Valor and Louisg, who actually do buy horses do not stand by this pettiness.

I was told that of the last 1000 horses sold up to and including the Cape Prem sale, that 500 was bought by 20 buyers. Buyers at the Cape Sale came to less than 100 individuals apparently with a supply of more than 300, but anyone can go and count for themselves. So the truth of the matter is that MOST horses are being sold between parties who know each other well.

The effect of this market collapse has resulted in many horses being sold at below cost. That leads to a market that has become accustomed to trying to get everything at below cost. Finally your "genuine" sellers start to leave as has happened. By genuine, I mean people who bred with the intention to sell and NO intention at all to take home.

What will be left, as is now, is that some producers don't really care about making money per se, by which I mean producing horses is not primarily a business for them. This is bad for the buyers because horses will no longer be sold at a market price (which I would think is some sort of business price, cost plus a certain profit margin), but at a price that the seller values. So if the seller has a nice colt by top 10 sire, he says at 300k it sells, below that I told trainer xyz to buy it and it will run with him. Maybe it sells later, perhaps a share or maybe none at all.

The latest 10 or so breeders that turned it up, did it because a) they could not, or struggled to, make ends meet, and b) many of the remaining sellers have (relatively speaking bottomless) pockets and if push comes to shove have sufficient resources to race their unsold stock worth keeping.

All these moans and groans are mad. How bad is it for buyers? The hardest thing to do is sell a horse, the easiest thing to do must be to go shopping for one. There are only a few horses where cost isn't enough to buy them.

And while I'm digging a hole for myself, those idiots who do the programming should be shot for their part in the destruction of interesting and exciting racing. The effect that Black caviar is having in Australia is a function of a system that allows good horses to win races. We are a breeding country, which allows us to have an up and coming young horse population all the time.

The flow MUST enable us to move horses onwards and upwards. Keeping a horse going by perpetual lowering of the handicap, till these geriatric horses are winning some half stake race after 70 starts at a crawl is disgusting, and moronic, in a country that can breed their own horses. We MAKE bad horse more and more competitive. Something MUST make room for that, and it's good horses! We have good horses with less opportunity than bad horses, so that people who were unlucky enough to buy poorly can make money....it's not competitive and it's not the true test of what the game should be about.

It's basically affirmative action in a sport which was created to find out who is best...just unbelievable! The ONLY people who can want this system are the trainers of bad horses. I own some bad horses, and I hate the fact the the worse they are, the more I have to swing on because only they can earn. Plenty crap races for them, against equally crap opposition. It's like watching manure harden. Thing is, I won't be back now that I learnt that I have to have crap in order to win.

I buy horses all over the world and one thing that has developed in the last 5 years is that the vast majority of horses that sell have one bidder vs. the reserve.

If this doesn't explain why a reserve is necessary and that it not be disclosed, I don't know what would.

As an aside, I have never seen bargains offered on a consistent basis, where quality horses can be bought at low prices, more than in the yearling sale in South Africa.

Great discussions all...

We need a 3 tiers of buyers - a top end market, a middle market and a bargain buyer to really effect a fair and strong sale for all involved.

We are hoping to have as many buyers in these 3 segments at the NYS so that we we can ensure wemake the sale a success.

1) Yes if the the buyer insists
2)No - at buyers cost