Topic: Pricing of Horses

[Argus Sheldrake]

Why is it ok for some people to place High prices on thier horses and not for others when all they are charging is what the horse has earned which as suggested by Shanthi no more than 2x the net earnings?

REF: http://www.finalfurlong.org/mb/viewtopic.php?t=2559&start=0&postdays=0&postorder=asc&highlight=pricing+horses

I am asking because I've seen horses who are being advertised at high dollar amounts all the time.  And right now I believe there is no rules on this.

[Shanthi]

Mainly because the key word there is "suggestion".

The "problem" with my placing an actual "rule" or coding limit on pricing of horses is that some horses will not follow that rule.

Babies - they have no race earnings, so the closest I could come would be to average their siblings' race earnings, if any...still, if the baby's by a very nice/not nice sire, this could be invalid
Unraced mares - average of foal earnings could work, but again, who she's in foal to complicates this, and if she has no racing foals, there's absolutely nothing to go by
Stallions - studs are generally priced far higher than other horses because you can potentially get a lot of income each year through stud fees

Even with horses who've raced, pedigree plays a huge factor.  You could take 2 2yos who're 5-1-1-1-1 $100,000 and whoever's got a better pedigree is worth more, even though the "rule" would limit people to selling them for a max of $50,000...if one of them is a filly from a nice line, she's probably worth more like $250,000.

[Andrea]

As someone who's sold a horse for a high price recently, I'm not apologetic.

I sold I Swear for $250,000.  Pulling up my budget page I've still LOST $92,000 on him with all the races he's been nominated for.  He was MSP, half to some very nice horses and full to a MSW who has produced a MSW.  So while the price I put on him was not the standard 1/2 earnings "guideline" the guideline is just that, and intended more for helping players get a feel for where to start.  I was also dropping the price on him by $50,000 a day until he sold.

I've seen several other horses up for high prices lately.  One Shanthi and I discussed and PMed the owner to investigate, and the other disappeared, either bought or the owner came to their senses.  When horses are priced unreasonably at over 100k we're less paranoid about them because if a player has that much money, hopefully they've had time to develop a feeling of if the horse is worth that or not.

[Cheq]

You mean I should have waited longer to buy him :wink:  

[Andrea]

Lol, I dunno.  I'd been toying with just pulling him off the market when he went "poof" so it's probably for the best .  Good luck with him though.  I really think he should run better for you.  All the rest of my horses seem to run better for other people.

[Argus Sheldrake]

Yeah I noticed those two and thought they were way over priced.  Not that I could purchase any of the horses that have been put up, but just thought I'd ask why it's ok for some to over price their horses and not for others to price their horses accordingly.  

I'm also asking because I"m looking at placing a yearling up for sale, soon.  And don't want to get chewed out for pricing them where I believe their potential is.

[Shanthi]

As long as you can (reasonably) defend your price, I don't care.  It's when maiden 5yo geldings are being put up for sale for $50,000 (let alone $250,000) that I get annoyed.

As people have said, the suggestion you referred to earlier is a suggestion/guideline.  If you can defend going above that guideline, go you.  If not, you're potentially gonna get questions/comments from people if you set insane prices, just like everyone else.

[Smylie]

The bottom line as I see it is that, the price, is what the market will bear. Along with that is the old saying"Buyer Beware".

[Cheq]

That's true. However if your going to put an obviously ridiculous price on a horse be prepared to get flack. Because people will comment on or question the price. Argus obviously thought at 250k I Swear was way over priced. I felt the horse had potential. I don't think he'll ever qualify as a stud. However he does have the potential to earn his price back twice over at least. The main thing is .... I had the money to take that chance. Prices look different depending on your bank account :wink:

[Argus Sheldrake]

Oh no I understand about the market determining the price.  And I understand about potential.  But right there as you've described it there was a $250,000 gelding.  

I guess what I'm getting at is that if your going to let the buyer determine if the horse is worth the amount or not why not let the buyer determine that.  As each person is going to have a different idea of the horses potential.  

I've been paying attention to some of the stallions people like purchasing sons and daughters of such as Planet Hollywood, the one I know of because I tried getting a couple of his daughters and just couldn't do it.                                  

I would also think that a horse with a decent race record would be worth more and also one that has the ability if raced correctly by the next owner to make its purchase price woth of winnings.  

For young horses it would mainly be based on the pedigree, and of course siblings, and half siblings records.

[Cheq]

I think your right about the gelding (My opinion), but not because it was a gelding. I don't know that anyone's been told directly "You may not sell the horse for that price." However if the price is obviously ridiculous you will get comments and questions :twisted:

[Shanthi]

I guess what I'm getting at is that if your going to let the buyer determine if the horse is worth the amount or not why not let the buyer determine that.  As each person is going to have a different idea of the horses potential.

Um...that's what people have been saying.  If someone really wants to pay $250,000 for a gelding, that's their choice.  If I see it, I'll probably post/PM the owner and ask them to defend their $250,000 price, since unless said gelding is 3 and just won the Derby or something, he's probably not going to bring that much back in revenue (unlike horses with breeding potential, as you can sell the foals/stud bookings).

Presumably if you have the money, you know how to spend it.  And if you don't, you'll go bankrupt and quit the game.   :twisted:

[KindleHopeFarms]

I don't mean to push anybody's buttons, or make this silly discussion continue un-necessarily, but I kinda disagree so hear me out and let me play devil's advocate... (ok.. like .5% disagreement but whatever  :wink: ..)
I think that the 'unfair' feeling here results from what we call in the business world 'good will'. It's hard to put a monetary value on the intangible assets of, in this case, a horse. AND I think the biggest problem is that people are unvaluing that good will. Andrea shouldn't have had to loose money on that sale. He's a really nice colt, and out of one of her foundation mare lines. The fact that no one would buy him before he dropped below the break even point kinda says to me that we (the players in FF) have an unrealistic idea of getting a 'bargain' every time we buy something.  We're not willing to pay what the horse is actually worth, so we're undercutting *ourselves* when we buy horses. I think that's why auction w/ reserves seem to be most popular with FF players because the base asking price for the horse (ie. the reserve, which should be the amount that we have spent on the horse total) is guaranteed and the rest is profit above.
Contrary to that, obviously selling a horse for $24 billion dollars, or whatever the random figure was a while back is outrageous and Shanthi is 100% correct that prices need to be supported. The only time I'll undercut a horse is if I want to get rid of it quickly. If things aren't working out, and the horse isn't performing well, I actually save the economy of FF more money by cutting him loose for some other player to try. Chances are, he'll perform better for that person and increase his value positively, rather than negatively. In addition, as I mentioned earlier, auctions do seem popular, but in the 'unfair pricing' complaint, I think auctions could be partially to blame (even though I love them). Obviously competition for a particular horse will drive the price up to more than the horse is deemed 'worth'.  But we allow this by saying, "Oh, someone is willing to spend that much on the horse, so it must be worth it.."  This brings in a whole other side of economics and the economic debate of Keynes vs. Adam Smith which I promise I won't bore you with... but, despite what Smith says, the invisible hand isn't always the best *especially when the goods are intangible*.....
I'm off my soapbox!  
-Kerry

[Andrea]

Lol, Shanthi and I were just commenting out the PF broodmares have gone insanely high.  I doubt if we'd put (m)any of those mares for sale on the sales page for their current price we'd have had any takers.

[CascadeJade]

Well said Kerry, I totally agree with you, although I never could have said it quite so well.  As a breeder, I'm tired of selling horses(unless I'm doing a newbie a favor) I've raised for less than their stud fees+nomination fees+taxes/upkeep(and that's not counting the intangible value of the broodmare's use for a year), but it seems to be a pretty common thing for not just me, but many other stables, no matter how nice the foal is. Unless a horse is a total dud(albeit, there are some out there) if raced correctly and frequently enough, horses in this game seem to earn back good money pretty quickly. The situation is getting better though, probably due to the fact that there doesn't seem to be quite enough horses in the game for as many people that want to buy.

Plus, this whole bias by newbies against geldings...I don't get it. A gelding can  run just as well for you, if not better, than an intact colt and trust me, its hard to make studs pay for themselves with all the competition the studs have with each other+breeding nominations etc.