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The Bad Economy’s Silver Lining
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Here we are – February ‘09 with all the excitement of the upcoming Scottsdale show right around the corner. This is typically a very exciting time of year – a time of new champions made – a time to leave the winter ice, snow and gray behind us for a few weeks and come to the desert to soak up the sun – and a time we count on year in and year out to bring brisk sales of Arabian horses at record-breaking prices.
In Scottsdale last year we saw Baske Afire sell at public auction for $2.8 million and DA Valentino sell for a reported $5 million. One has to wonder what we’re in store for this year.
In the midst of our country’s worst economic crisis since the great depression, will this year be different? How can we possibly expect sales to be good?
The silver lining in our bad economy is that when traditional investments – stocks and real estate – are no longer attractive, people with money divest their holdings in those assets. They look for alternative places to invest, and that place typically is in commodities and alternative investments, ranging from gold to collectibles to Alpacas to Arabian horses. A recent Wall Street Journal front page article reported that the equity in the brand “Hot Wheels” (the toy cars) is now worth more than the equity in all of General Motors, and that people are investing in vintage champagne and wine with more confidence than they are in land. And like any other of these collectibles and alternative investment classes, we have a product in the premier Arabian horse that is equally compelling, commanding and worthy of investment by anyone.
Accordingly, I predict sales will continue to be extraordinary at the top end of our market. Like the art market, the great masters always hold their value and even go up in times when the economy turns down. We are currently witnessing the same effect for the top end premier Arabian horse bloodstock marketplace.
There are signs of this phenomenon already in play this year. We’ve heard of a yearling colt selling for over $1,000,000 and a legendary stallion selling for a reported $2.5 million. And no doubt we’ll hear of many more sales like this at the top end of the marketplace.
Recent episodes of the Arabian Horse Insider programs highlighted specific information about industry sales. In her recent interview on the Insider, Kim Jarvis comments that she is now insuring our top stallions in price ranges over $5 million. In this week’s episode of the Insider, Ted Carson told the story of an Arabian filly whose value has doubled in the last year from $400,000 to $800,000, and Kevin Roesch, an international export agent, reported in his interview soon to be posted, that his business to ship horses out of the country is more brisk than ever.
There are signs all around us that our market is alive and well at the top end, so let’s look forward to another exciting Scottsdale week in which no doubt we will witness significant sales. Moreover let’s count our blessings that we do indeed have a silver lining working for us in this bad economy as investors look for alternative places to invest their funds. The time is now to seize our opportunity and promote premier Arabian horse ownership and the amazing lifestyle that goes with it to as many new enthusiasts as we can. And let’s celebrate the great living treasure we are all so privileged to be part of as we embark on this annual Scottsdale week.
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Fall in Love with the Arabian Horse all over again
It’s great that the high end of the market is doing so well. However, as a person who came into the breed from another breed in 1982, I have seen a lot of changes. At my first Canadian National Show in Edmonton, Alberta that year, I thought that the most exciting thing I had ever seen was the Top Ten stallions coming in at high speed with loud music and lots of cheering. The “taming” of the halter classes kind of took that away!
When you were talking about the San Antonio show with the excitement of the contestants, I thought back to my own introduction into the business in Alberta, when everyone (in my area at least) showed their performance horses in halter the first day of the show, just for fun. Some people even at large stables actually helped get their horses ready for their classes!
I have seen all the new divisions, ie hunter, country, sport horse, etc. started mostly by people who couldn’t or didn’t want to compete against the really good horses in the existing divisions at the time. That’s good, but it’s why our shows have been cumbersome with too many and too small classes.
One major change over the years was in the entltlement to win that many people have. Forget about learning to ride and paying your dues for a few years before you got to win at Nationals or Scottsdale–how it’s about buying a very expensive horse, a very expensive outfit and being angry if it is just not enough. That other guy who paid just as much and also learned to ride over the years still won the class.
I think the best answer is in getting a great number of people interested in Arabian horses, rather than just the “investors”, many of whom have about as much feeling for a horse and/or knowledge of them as a post. In my area in Arizona, some of these people are giving away horses, but they were giving away horses ten years ago. People have way too much money and way too little respect for these beautiful animals if they give them away rather than taking the time and effort it takes to sell one.
The best thing about this economic downturn in Arizona is that many trainers who couldn’t be bothered to even talk to a “newbie” a couple of years ago are now offering beginner lessons. Down the road, this is going to be great, for all those beginners will eventually own horses. Some of them, who agonize over the purchase price of their first horse will continue and buy or raise better and better horses in the future.
There is obviously a lot to know about this. I think you made some good points in Features also. Keep working ,great job!
I just purchases an Egyptian Arabian. I have only owned the filly for a week and I already fear the investment I have made. She is at the top of the bloodline, and will make an excellent show horse and exceptional for breeding. At this point my fear of what I have spent versus what it will take to show her is making me consider taking a loss so I won’t end up broke. She is beautiful, and melts my heart. I see her potential and so does everyone else. I can try to sell her, keep her and take a second job, or cut my losses. I am so scared and confused I don’t know what to do. I need help and advice. If anyone can help, please contact me.