07/15/2007 11:00PM

First session a buyer's market


LEXINGTON, Ky. - Danny "Bear" Dion looked up from signing his receipt for a $350,000 Lion Heart colt and found himself surrounded by reporters' microphones, cameras, and tape recorders.

"I never got so much attention in my life," said Dion, owner of Bear Stables. "What did I do? I just bought a horse.

"A very nice horse."

Had he sold at last year's Fasig-Tipton Kentucky July yearling sale, Dion's $350,000 purchase wouldn't have been a headliner; the 2006 auction had a top price of $1.2 million and set sale records for average and median. But Monday's opener for the 2007 Fasig-Tipton sale was a real buyer's market, with no million-dollar prices. Buyers, for the most part, were walking out of the pavilion with receipts for horses they wanted, sometimes at what they felt was a discount.

Bloodstock agent Buzz Chace, who bought another Lion Heart colt for $300,000 on behalf of Lewis Lakin and Terry Finley, estimated afterward that the colt might have brought $600,000 in 2006.

"I think it's a good market to buy horses," Chace said.

It seemed a good market to sell Lion Hearts, too. The first-crop Ashford stallion stood in 2005 - the year these yearlings were conceived - for $30,000, a fee that looks even better now to White Fox Farm and Green Willow Farm. White Fox Farm bred and sold Hip No. 219, the $350,000 colt out of Aim for the Moon, through the Taylor Made Sales agency. Green Willow bred and sold Hip No. 193, the $300,000 colt out of V V S Flawless. Both broodmares, incidentally, were by Deputy Minister, who leads the year's broodmare sire rankings.

Led by that pair, the session sold 177 horses for $15,811,000, down 6 percent from last year, when 154 horses sold. The average price for the session fell 18 percent, from $108,610 to $89,328. Median price, however, stayed the same at $75,000. The buyback was 34 percent, up from 27 percent.

Dion, seated beside his wife Gwen in Fasig-Tipton's newly remodeled auction pavilion, has a simple goal for his new colt.

"The Kentucky Derby," he said.

Hip No. 219 eventually will go to trainer Reade Baker, Dion said, adding that he plans to scale his racing stable back from 37 horses to about 20.

Yearling-to-juvenile resellers, called pinhookers, are scaling back, too. That provided one reason for the lower prices at Fasig-Tipton July, traditionally a popular sale for pinhookers. Last year's downturn in the juvenile market left some pinhookers holding expensive inventory, and this year they were clearly applying rigorous discipline to their purchasing at Fasig-Tipton.

"It's no shock or surprise: It's getting tougher to sell good 2-year-olds," veteran pinhooker Niall Brennan said. "Seems like every year there are more hoops to jump through. But it's what we do. So we're going to continue playing, but we're going to be more conservative. It's not a matter of not buying stock, but maybe we overpaid for stock in the last couple of years."

Brennan also noted a trend that has worried some longtime pinhookers - the willingness of more traditional racehorse buyers, so-called "end-users," to try their hand at selling juveniles.

"That takes buyers out of our 2-year-old market," Brennan said.

But some end-users are willing to take the chance as a way of diversifying their options. Case in point: Lewis Lakin and Terry Finley, the buyers of the $300,000 Lion Heart colt. Lakin is best known for his Lakland breeding operation and Finley is president and founder of the West Point Thoroughbreds syndicate, whose recent successes include Dream Rush and High Finance.

"Pinhookers need inventory, and we need inventory, too, to market to our syndicates," Finley explained. "We're not overexposed by buying a $750,000 or $1 million yearling to pinhook.

"The investors we're dealing with are more and more sophisticated," he added. "People don't just want to write checks and hope they have some fun. They want a portfolio and a plan, and they want a portfolio that they feel gives them a better shot than the average guy. . . . This is another investment opportunity."

One pinhooker who did buy aggressively was Murray Smith, whose purchases included a $150,000 Harlan's Holiday-Leading the Way filly; a $140,000 Domestic Dispute-Sally's Affair filly; and a $120,000 Speightstown-Strongerthanpride colt. Smith said 2-year-old buyers have become so demanding that pinhookers must be selective in purchasing yearlings.

"The guys that buy 2-year-olds want a horse that works not necessarily extremely fast, but fast enough; that moves well, that X-rays and scopes well, and that can go two turns," Smith explained. "So that's what we've got to have. The money's in the two-turn horses."

Those horses can be expensive, a fact that Smith acknowledged.

"But I look at it this way," she said. "I've got 36 stalls, and if there aren't horses in them, then I don't make money."

o The sale's only Smarty Jones yearling, and the first to sell at public auction, brought $150,000 from John Kimmel, agent. The chestnut daughter of the Lord at War winner Must Be a Lady turned a profit for sellers Jim and Karen Perrone of Perrone Sales. They bought the Smarty Jones filly as a weanling at last year's Keeneland November sale, where she failed to reach her reserve at $125,000.

"We bought her privately after the sale for a lot less," Jim Perrone said. "I love this filly. She's got a lot of class and moves well. I thought she might bring $200,000 to $250,000. This market is tough."