"Rarely do I buy the obvious, "perfect", yearling. I feel there is more value in living with certain conformational faults. Pedigree, its blend and strength in the family, is of paramount importance. Conformationally, the balance, presence, strength of hip and genuine athleticism are all significant. Finally, the price is the determining factor."

Last September we were very active in the yearling market at Keeneland where we bought fifteen yearlings for nearly $4 million. Our clients have varying programs and our objective is to take advantage of a market like the Keeneland September sale where you have such a broad source of athletes and pedigrees to satisfy our client’s needs.

The yearlings we bought have all been broken and sent to their respective trainers.  Breaking the yearlings properly is as vital a step as the selection, mating, where raised, and eventual trainer. To this end, we have utilized Niall Brennan and his brother Ian and feel they provide an advantage in developing a foundation for each individual’s future.

It is often stated that the barometer to how strong the yearling sale will be, starts with the two year old sales. Pinhookers make up such a significant portion of the middle market and recently their demand has drifted through the middle market to touch the upper market in both weanling and yearling pinhooks. This sector of the market does not differ from others with its cycles. When they do well, this attracts additional participants driving up that market until the demand cannot sustain the supply and you have a correction. We think most in this market would tell you this adjustment has been occurring for the last three years, but appears most significant this year.

How this will affect the yearling market, we will know sooner than later with the first major yearling sale starting mid July at Fasig Tipton. We will work this sale as we have the last three years, looking for pinhook opportunities. Fasig Tipton has developed a niche market to counter the gargantuan Keeneland September sale and pinhookers have been very active in this market in the past. It will set a tone for the remaining sales including the weanling and broodmare sales in November.

	PALACE EPISODE

PALACE EPISODE winning the G1 Racing Post Trophy in 2005 demonstrated our approach to yearling purchases. In his case, he was identified as a pinhook opportunity, however since he was by the European stallion, Machiavellian, we knew he would have to be reoffered in Europe. Introduced to the outstanding Irish horseman Con Marnane by associate Marette Farrell, the idea was to sell him in Newmarket, England. He demonstrated considerable talent and class in his early training but lacked in size and was not sold when offered at the two year old sale. Con sent him to emerging super star trainer Kevin Ryan, and he went on to become one of the leading two year olds, and was eventually sold to Godolphin for a significant amount.

Palace Episode was not a very big yearling, yet he was by an exceptional stallion Machiavellian, and we felt he would be overlooked in the September sale and thus provide value…. which he did at $100,000 cost.

A Millenium Wind colt offered in the 2005 Fasig Tipton yearling sale provided similar opportunity since he was by a little known stallion in a select auction. A powerful individual with a very athletic look and walk, this colt sold for $100,000 as a yearling. Named, EXHALE, Niall Brennan pinhooked this colt to John Sadler in the 2006 February Calder sale for $800,000. This year, Exhale won his second start in such impressive fashion that he obtained the highest rating of any three year old to that date and his owner reportedly accepted a very significant seven figure offer. Unfortunately, on veterinary examination an injury prevented the completion of the sale.

Our objective is to seek opportunities and the greatest value possible. However, we will not compromise on the athlete…. what we believe to be a racehorse. In the end, no matter if the yearling is for pinhook purposes, a client who only has $35,000 to spend or $1 million, this is our approach, and over the years it has provided a very high rate of return, especially when you compare these results to others.

Nicoma's record of buying 20% stakes winners or stakes placed horses from yearlings bought provides the confidence to our clients and ourselves to be active in the yearling market and develop these programs.