[QUOTE=WilfredLeblanc;4555137]
Actually, you’ve put my original question much more succinctly than I put it myself. Thanks.
I understand that from the standpoint of economics, the value of anything at a particular time is the highest amount someone is willing to pay for it at that time, but to leave the analysis at that is to say that any price is reasonable if some dope or spendthrift can be found to pay it. Depending on your premises, maybe that’s so, but I don’t share those premises. When you say,
I can’t help thinking the hypothetical trainer’s talent may lie more in spotting rubes than in training horses.
What I’m trying to ask about is when/how you can be sure that an asking price is ridiculously inflated, where the major price breaks are, in terms of age, skills, experience, etc. I realize there’s no Kelly Blue Book for hunt (or any other) horses, but is there something even remotely like that? Some laymen’s version of actuarial charts that equine insurance providers use, for instance?[/QUOTE]
Using that logic, you’d also come up with a scenario that the trainer’s time is worth X per hour or day or week, regardless of the result they produced. So let’s say they purchase a real dud for $10k, spend a year of diligent effort on it and put in say another $10k worth of training. Does that make the dud horse worth twenty grand? Of course not.
Equine insurers will insure a horse based on its purchase price in the absence of a performance record. Once the horse is out there competing - it doesn’t matter what the original purchase price was; the insurance is based on what the horse has achieved. If you can buy an OTTB and turn it into a winner at WEF, the insurance companies will insure it for six figures without batting an eye.
Horses, especially horses purchased by amateurs for recreation/sport are worth what those buyers are willing to pay; that doesn’t make the buyers rubes or spendthrifts or any other derogatory term. They are simply buyers who make a value judgement, usually based on how that horse compares to others they have seen with generally similar characteristics - that this particular horse is the most desirable available in their price range, and that is the one they write the check for.
Obviously the value of a horse depends to some extent on the audience making that assessment. An amateur like me may place a high value on a kind, easygoing horse with a cheerful temperment and enough scope and athleticism to get me out of trouble if I miss a bit at a bigger jump or going through challenging country or whatever. A pro who can spot that nice temperment and good athletic ability and who can develop the horse’s rideability to make it suitable and pleasant for me to ride after a few months of training is entitled to charge a premium for that, in most markets, even if the “profit” they make on the deal seems excessive in terms of an hourly rate.
They are taking on the risk of buying the horse, making it up, and then marketing it - all uncertain propositions when you are talking about a living, breathing being that can hurt itself stepping out of the stall in the morning. Profit is the reward for taking on that risk.
My point, I guess, is that the WORTH of a horse may have little to nothing to do with its original purchase price. It has everything to do with the suitabiity and desireability of that horse to the target audience.
Are there “blue book” values for horses? No - but there is a market and those who are buying are well advised to know, generally, what the range is in their area is for the type of animal they are looking for.
I have hunters and jumpers, not hunt horses, but the market forces are the same. MOST horses in that market are sold to children and working adults - not professionals. There is generally a significant premium placed on temperment and a horse that can perform well with a less than perfect ride. The horse generally does NOT need unlimited scope or the type of athletic ability that a professional would require for say, a Grand Prix jumper (and who might sacrifice a bit of temperment and rideability to get the spectacular scope and talent for the big sticks.) The horse that is worth six figures as a top amateur hunter isn’t worth half that to a pro - because those two buyers are seeking entirely different “products.” The animal is just better suited to one job or the other… and is marketed and priced accordingly.
