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Jerardi: Besecker transfers successful business formula to racetrack
Joe Besecker is the founder, chairman, president, and chief executive of Emerald Asset Management, which controls $3 billion in small- and mid-cap growth assets from its Lancaster, Pa., base. The 1979 Saint Joseph’s University graduate loves his school’s basketball team, has tailgated for years at Penn State football games, and supports all the Philadelphia professional sports teams.
He also has long been fascinated by horse racing, and his stable, which races mostly at Penn National, is having the best year it has ever had as we pass the midway point of 2014.
“I have 15 full-time research analysts [at Emerald],” Besecker said. “I use that same kind of methodology [in horse racing]. We look for conditions. We look for numbers.”
Besecker has about 30 horses at the track right now. He got very aggressive claiming earlier this year.
At Penn, Besecker’s horses are 22 for 81 (27 percent) this year. He is the leading owner by a wide margin. Overall, the stable has 30 wins in 2014.
He uses several trainers, including his main man, Tim Kreiser, at Penn. He also has horses with Scott Lake, Brandon Kulp, the Guerreros (Carlos and Lisa), a few with Jamie Ness, and, soon, some with Hugh McMahon. The stable got hot a few months ago.
“We’re just trying to take advantage of the inefficiencies,” Besecker said. “With the weather so bad this winter, people were putting horses in very advantageous positions. Races weren’t going, so people were dropping horses where they might not normally run. So, I decided to invest and stock the stable with horses that probably wouldn’t have dropped. People were trying to create cash flow.”
Like his regular business, Besecker is trying to buy low, win a few, and, if necessary, sell high or at least at a profit.
“Really, it’s about the team,” Besecker said. “We probably disqualify 70 percent of the horses we look at, by the trainer or for some other factor. We follow horses. Sometimes we’ll follow them for months.”
There are similarities between his full-time business and his horse-racing business. Research, Besecker said, is critical.
“Everything I think of in life is the three P’s,” Besecker said. “Get the right people, have the right process, performance should come. That’s really my theory, what I do in work, whether it be in private equity, the public market, whether it be in horses or whatever.”
There are more than a few things he would like to change about the sport.
“Horse racing, as you know, is not geared to the owner,” Besecker said. “They recognize the jockey, they recognize the trainer. You had to show me I was the leading owner at Penn. There’s no promotion, there’s no ‘attaboys’ given to the owners. As a matter of fact, they’re almost looked at as a mark. It would be nice if the tracks would have some recognition for the gas in the tank for the business.”
Besecker appears on Fox Business channel once or twice a month. He is a regular host of a Saturday morning business radio show in Philadelphia. And he is at the track as often as possible to see his horses run.
“Nobody loves horse racing more than me,” Besecker said. “That walk from wherever you’re watching to the winner’s circle, I don’t care if it’s a $5,000 claimer or a graded stakes, it’s still a thrill.”
He loves the horses, the racing, and the competition more than the gambling, although he will have a bet.
“When I was a kid, my parents would go with a group once or twice a year, and I was always intrigued with it,” Besecker said.
This winter, he thought he might have a big horse. Classic Giacnroll was nominated to the Triple Crown. The horse finished second in the Jerome Stakes but was then outrun in the Withers and Private Terms. He ran third in the Delp Memorial a month ago at Delaware Park.
Besecker’s horses have started in 1,738 races, with 324 wins, since his first starter in 2000. The stable won 46 races last year and 46 in 2007. It looks like the stable might win more than 50 this year.
“You’ve got to learn a lot of lessons,” Besecker said. “I look at it the same way as the market. You buy a diversified portfolio of horses.”
Then, you get them ready and watch them run.
“I love the animal,” Besecker said. “It’s a lot of fun.”
Apparently the form doesn't know it's about the player. The sport is dying and they want to charge extra for news about the horses. Extra? Are you kidding me? They should be standing on every corner handing out the news for free. Just wait till everyone is gone and see how many form+ subs they sell. It's a horrendous business decision. I for one will NEVER pay extra to read about the sport. I'll save the money for sunday ticket. And I'm speaking as an owner.
Not geared to owner? What abt player? Key to any business is knowing who the customer is. Apparently he doesn't.
It make sense... the horse racing and investment link, just ask best handicapper of them all--Warren Buffett--who cut his teeth at Ak-Sar-Ben. Much is the same in analyzing the two enterprises, their past performances--be they races or earnings, the management (be it CEO or Trainer/Jockey), the markets (odds or stock prices)... However, I can tell you have now 30 yrs in both (yikes) the horse racing business is the harder to make money in--but easier to have fun--than investments. For the average person--go with index funds for investments; horses for fun and recreation (or a tax break if you need one). That said, some of the better known partnership groups have had well bred fillies get on the board in graded stakes (which makes a little money over the costs) and cashed in when they run them through the ring at Keeneland in foal as broodmare prospects (where you can get 6 figures if your prospect is from the right family, with the right conformation and performance). So a small time investor could go in 5, 10, 25% and do well there (but odds are against it). Trying to run a claiming barn, however, is super high risk do to the capital intensive nature of the operation (or at least my costs are off the charts in CA; never owned in PA)
You're complaining about respect of being a owner, what about the "real people" the bettors, who makes is all happen.
Great article. Super guy. Outstanding friend. Lookin for the next big one!
I agree, I've worked for years modeling Neural networks and other algorithms It works well in Horse racing, the higher the purse the more accurate.
Great guy and an asset to the business. Well done Joe. Terry