MONTJEU.COM

An Independent View of the Bloodstock World

Category: Miscellaneous

  • How to choose the right stallion-10 tips

    montjeu topten list

    It’s the most important decision of the year- which stallion to choose? Below are my ten top tips to help make the right decision for your mare.

    1. Set an appropriate budget. This is easier said than done as opinions will differ widely as to what is ‘appropriate’. I would suggest asking yourself two simple questions:
    a) is my mare worth at least 4 times the stud fee of the stallion?
    b)Will my mare be in the top third of the book of mares visiting that stallion?
    The hardest temptation to resist is the temptation to over-breed your mare in the hope of quickly upgrading the family. Resist this temptation or your will lose money. The old maxim of ‘breed the best to the best and hope for the best’ remains true, but don’t extend it to include ‘breed the moderate and worst to the best’.

    2. Know the conformation of the stallion you are using. Do your research, have a good look at photos, videos and in the flesh. Look at his offspring. It’s critical that you look to balance out any weaknesses in your mares conformation by choosing a stallion who will offset, not reinforce these defects.

    3. Know the fertility statistics of the stallion. Although modern management and scanning techniques have greatly improved the situation, having a barren year is an expensive lesson.

    4. Look at the other costs. It’s not just the stud fee but the ancillary costs, such as transport, mare boarding fees, veterinary fees etc. What are the payment terms?

    5. Does the stud have a reputation for fairness? If the foal dies shortly after birth will they strictly adhere to the contract? Will they facilitate you in future years?

    6. What is the stallions book size? This is a critical factor as it can impact on

    a) the stallion’s fertility
    b)the level of competition you will face in the sales ring you tend to be benchmarked against the other offspring of that stallion rather than unrelated foals)
    c) the likelihood that you can get more favourable terms on the stud fee.

    7. Know your purpose. Are you breeding to race or to sell? If breeding to sell you are a slave to market fashions and will have to exclude many perfectly sound stallions who are out of fashion. There is no point being right about an underrated stallion but losing money when it comes to sell.

    8. Remember you might have a filly! This might sound obvious but if the offspring is a filly consider how easy or difficult it would be to subsequently breed her. This is particularly the case in Europe where there are a lack of alternatives to the Sadler’s Wells and Danehill lines and we are seeing increasing inbreeding to these influences.

    9. Proven vs Unproven. If you are dealing with a young mare remember that you should have a long term plan for the management of her career. It is critical to try and achieve early success with her offspring as this will obviously make later foals easier to sell. For that reason don’t use unproven stallions with an unproven mare. Later in her career you can use first or second stallions once she has established her record.

    10.Get impartial advice. Breeding horses is not cheap and it makes sense to get expert advice. You wouldn’t buy a car or a house without getting a mechanic or engineers report yet people seem loathe to pay for another opinion on their mating plans. Look at sites such as www.ematings.com for a list of available experts or contact this author directly at victor@montjeu.com to get a fresh perspective on your options.

  • First Season Sires,Keynes and a little poetry

    In this month’s international thoroughbred magazine I examined the profitability of first season compared to subsequent crops. The full text is shown below:

    First season sire-watch the bidding go higher
    Second season sire- will find a buyer,
    Third season sire- results will be dire
    Fourth season sire- playing with fire.

    One of the mysteries of the bloodstock markets has to be the infatuation with first season sires. Inevitably 90% of new sires disappoint, yet buyers still covet to the next big thing. I analysed the commercial returns on the main UK and Irish stallions who retired to stud in 2006 and plotted the profitability of their first four crops. The results are shown in the table below and summarised in my above piece of doggerel. It may not appear in too many poetry anthologies but I think it gives some useful guidance to commercial breeders, when deciding on a mating.

    Methodology and findings

    My analysis was based on stallions who retired to stud in 2006 and who remained standing at stud in the UK and Ireland for the next four years. The averages for their yearlings sold at public auction were then plotted from 2008-2011. Stud fees and sales averages were converted to a common unit (in this cases UK guineas) and an amount of 7000 guineas was allowed for upkeep. The average sales price of each crop of yearlings was then divided by the production cost of those yearlings (stud fee+annual upkeep). The results show that the first crop of foals were the most profitable with an average sales price that was 1.42 times the productions cost and the third crop was the worse achieving only 1.07 times the production cost. The year three and four results are of course influenced by racecourse performance by the first two and three year olds for those stallions. In that respect it is no surprise to see Dubawi and Shamardal show positive results, as amongst the selected stallions they best fit into the 10% category of successful stallions.

    Average vs production cost
    Sire    1st crop    2nd crop    3rd crop    4th crop
    Antonius pius    1.16    0.53    0.27    0.76
    Arakan    0.93    0.63    0.55    0.27
    Avonbridge    1.26    0.92    0.99    1.15
    Azamour    1.85    2.17    2.11    1.60
    Camacho    1.52    1.30    1.15    1.27
    Chineur    0.70    0.81    0.83    0.63
    Dubawi    2.03    1.72    2.67    4.52
    Firebreak    0.94    2.89    0.71    1.77
    Footstepsinthesand    1.38    1.42    1.16    1.03
    Motivator    2.18    2.27    0.99    0.89
    Oratorio    2.01    1.27    0.70    0.89
    Pastoral pursuits    1.22    1.32    1.93    1.35
    Rakti    1.17    0.53    0.48    0.23
    Shamardal    2.15    2.03    1.77    2.99
    trade fair    0.98    0.61    0.71    0.55
    Whipper    1.66    0.92    0.35    0.65
    Zafeen    0.95    1.36    0.75    0.30

    Average    1.42    1.33    1.07    1.23

    Weaknesses in Methodology
    It is acknowledged that there are a number of weaknesses in the above analysis.
    The sample size is quite small, but reflects the fact that some sires who started covering in 2006 either died, were sold or did not have enough sales representatives to provide four years results. In addition there was considerable movement in the euro/sterling exchange rate over the period and this had a significant impact on the results. Ideally an adjustment would also be made for the trend in the overall yearling markets in those particular years. The chosen upkeep cost of 7000 gns is also quite arbitrary and does not allow for the depreciation in the value of the mare. Finally it would perhaps be better to look at medians rather than averages to negate the possibility of associated parties paying very high prices for stallion offspring to achieve headline grabbing top prices that also increase averages.

    Making sense of it all-Keynesian wisdom

    As far as I know the economist John Maynard Keynes, never wrote about horse racing but had he done so he would surely have recognised some of his theories in operation in the bloodstock market. One of his concepts became known as the Keynesian beauty contest.  This described a fictional newspaper contest, in which entrants are asked to choose from a set of six photographs of women that are the “most beautiful”. Those who picked the most popular face are then eligible for a prize.
    In terms of a winning strategy, Keynes wrote  “It is not a case of choosing those [faces] that, to the best of one’s judgment, are really the prettiest, nor even those that average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be”.

    Commercial breeders are involved in such a game. They may not particularly like the first season sires they are using, but their own beliefs don’t matter, it is about trying to guess what everyone else thinks, everyone else will think. They are short term investors who exit before the fundamental value of the yearling (ie its racing merit) is known.  As Keynes also wrote “Successful investing is anticipating the anticipations of others” and when it comes to breeding it seems that people think, that people think it is worth paying more for the latest sires.
    All of this irrational behaviour is possibly explained by the prejudices of trainers. As trainers handle more bad horses than good ones and one bad horse can turn them off a sire, then they are likely to dislike a lot of sires! With new sires, trainers have not had the chance to form such prejudices.

    Conclusions:
    It’s not easy being a commercial breeder. Survival requires profit and that requires suitable stallion selection.  The statistics above can help in that stallion selection. If breeders are to be tempted to use third and fourth season sires then breeders should be looking for substantial discounts on the published fees before the use of such stallions becomes attractive. The use of unproven stallions will continue as long as it is profitable. I will leave the final word to the great Keynes, who had sage advice, relevant to any breeders thinking about challenging the madness of the markets preference for unproven sires when he wrote “the markets can stay irrational, longer than you can stay solvent”.

  • Montjeu RIP

    We all know that death is inevitable, yet we are still surprised when it happens. Montjeu was only 16 when he died today from complications related to septicaemia. He leaves behind an outstanding legacy with too many big winners to name, but even looking at his classic winners gives a sense of his achievements.

    Classic Winners (Northern Hemisphere):

    Hurricane Run (2002 c ex Hold On by Surumu) won Irish Derby

    Motivator (2002 c ex Out West by Gone West) won Epsom Derby

    Scorpion (2002 c ex Ard Melody by Law Society) won St Leger

    Frozen Fire (2005 c ex Flamingo Sea by Woodman) won Irish Derby

    Fame & Glory (2006 c ex Gryada by Shirley Heights)- won Irish Derby

    Authorized (2006 ex Funsie by Saumurez) won Epsom Derby

    Pour Moi (2008 c ex Gwynn by Darshaan)

    Masked Marvel (2008 ex Waldmark by Mark of Esteem) won St Leger

    Additional “Classic Winners” (depending on your definition)

    Montare (2002 f ex Contare by Shirley Heights ) won Prix Royal Oak (French St Leger)

    Jukebox Jury (2006 c ex Mare Aux Fees by Kenmare) won Irish St Leger

    That is a remarkable level of consistency for a sire who has only had 8 crops of three year olds to represent him so far. It also goes without saying that there could be plenty more names added to this list before the final total is known with Camelot (ex Tarfah by Kingmambo) a short priced favourite for this years Derby and Guineas.

    In addition he did very well from his stint down under (although it took some time to recognise this) and he has also enjoyed  major national hunt success including festival winners Hurricane Fly and Noble Prince.

    Legacy

    When Montjeu’s first crop of three year olds hit the track it was a phenomenon. He sired the first two in the Epsom Derby (Motivator and Walk in the Park) and Irish Derby (Hurricane Run and Scorpion). For good measure Scorpion added the St Leger and Hurricane Run the Arc that season. It seemed the true successor to his sire Sadler’s Wells had finally arrived. And then along came Galileo.  Now it seems that Montjeu is always to be compared to his more expensive stud mate and almost invariably unfavourably. “He doesn’t sire milers and he doesn’t sire fillies and they carry their heads a little high” so the cream of the mares go to Galileo, just like their sire Sadler’s Wells kept the best mares from Caerleon. Indeed one wag suggested to me that the cause of his death was a broken heart as he felt like a jilted lover losing so many of his mares to Galileo!

    But the comparison with Sadler’s Wells and Caerleon and the conventional wisdom is unfair. Montjeu is to my mind a better sire than Caerleon and in many respects a better sire than Galileo. The most important stat is usually stakes winners to foals- Galileo has 98 from 1651 foals of racing age (6%), Montjeu is currently 100 from 1318 foals (8%). If we factor in the superior quality of Galileo’s mares then Montjeu’s comparative record is all the more laudable. He also outperformed Galileo from their shuttle crops. As for his supposed failings with fillies and milers, those perceptions could easily change and very rapidly if for instance Camelot won a Guineas and Wading a fillies classic. With further crops to come it is worth waiting to see if his record with fillies and milers will improve in time. Even if they don’t, he has done enough to be regarded as one of the ten greatest sires to ever stand in Ireland. The others probably consist of Sadler’s Wells, Danehill, Habitat, Galileo, Birdcatcher, Gallinule, Blandford, Gallinule and Desmond.

    Sons at Stud

    To date the record of his sons at stud is underwhelming. Motivator seemed afflicted by bad luck suffering injuries and having small resultant crops but he was disappointing. Hurricane Run has got plenty of stakes horses but quickly needs a big name to keep his name in lights. Authorized had a quiet first season last year with his two year olds so he needs them to improve considerably as three year olds. There are still plenty of sons either yet to retire or just retired so there is plenty of time for a successor to emerge and it is worth remembering that Sadler’s Wells had more failures than successes before Montjeu came along.

    Broodmare Sire

    It is also very early to make pronouncements Montjeu as a Broodmare sire.  However last year saw Montjeu as broodmare sire of two of the best two year olds in Europe via Dewhurst winner Parish Hall (2009 c by Teofilo ex Halla Siamsa by Montjeu) and Group 2 winner Restiadargent (Kendargent ex Restia by Montjeu). Given Montjeu’s rivalry with Galileo it is interesting to see them combine in the pedigree of Parish Hall who is by Galileo’s son Teofilo and we can expect to see there names increasingly linked in future pedigrees.

    Final Word

    Montjeu was an outstanding racehorse and his performance in the 2000 King George was as impressive as you could wish for. He had a great turn of foot for a horse who truly stayed 12 furlongs and would have got further. He also had courage as he demonstrated in a tough Arc when El Condor Paso got first run on him in heavy ground. He passed on many of these attributes to his offspring and he is huge loss to the European breeding industry.

  • Predicting Sales Returns

    The Keeneland sales are critical to the US bloodstock industry. When analysing the sales, industry experts often focus on the strength of the buying bench which depends on the presence or otherwise of European, Arab, Japanese and domestic buyers. The experts debate the impact of variables such as changes to exchange rates or tax charges, the size and perceived quality of the catalogue, or tinkering with the sales structure through select sessions. The presence of the offspring of star stallions or fashionable stallions may also be invoked as a way of explaining the likely sales outcome. These factors are real and do have an impact but the best indicator currently available is much more straightforward-The Dow Jones Index. I consider the issue in detail in the September edition of International Thoroughbred magazine. To read the article click here