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Other Recent News --
PAULICK REPORTS' EQB
interview follows:
[ BY THE WAY -- Use link immediately below to go
to a different recent cover article about the story
behind EQB that is in the August edition of the
Mid-Atlantic Thoroughbred magazine. ]
A SCIENTIFIC APPROACH TO THE SALES
(9/22/10)
By Ray Paulick
PAULICK REPORT FORUM brought to you
by BREEDERS' CUP:
Jeff Seder, who formed EQB (or Equine Biomechanics and Exercise Physiology
Inc.) in 1978, isn't cut from the same cloth as most of the people shopping
for racing prospects at the Keeneland September yearling sale. Harvard
educated (undergraduate, law school and business school) and a longtime
business executive and licensed attorney, Seder has brought a scientific
approach to the business, spending decades compiling and analyzing massive
volumes of data related to Thoroughbred physiology and performance. His
scientific work is complemented by EQB's vice president, Patrice Miller,
whose background as an accomplished horsewoman has made them a formidable
team.
Together, they have helped elevate such racing operations as George
Strawbridge's Augustin Stables and Ahmed Zayat's Zayat Stables with their
purchase recommendations of horses such as champions or Grade 1 winners
Eskendereya, Forever Together, Informed Decision, and Zensational.
With that success, they have picked up even more clients, and during the
current Keeneland sale rank among the leading buyers with 23 purchases for
$3,625,000, an average price of $157,609. Seder took time to discuss EQB's
recent growth and his and Miller's approach to yearling and 2-year-old
selection with the Paulick Report. He also hinted, after showing interest in
buying the Maryland Jockey Club racetracks out of bankruptcy, that he is in
the market to purchase another major track.
Question from Ray:
EQB has been around for decades, but it's not until lately the company is among the leading buyers at both 2-year-olds in training and yearling sales.
What was the turning point?
Answer:
We have done research every year since 1977, spending a great deal of time
and money with some of the best minds in the relevant medical, engineering,
and biomechanics specialties at the best universities. So, every year we've
gotten better, and more determined. Somewhere it reached a critical mass of
data, technology and horsemanship - probably around 2006.
You know we had successes in the past like Madcap Escapade, and were
underbidders on Monarchos as a 2 year-old, but it never seemed to lead
anywhere. We finally got a client who let us sign the tickets, with enough
money to actually buy the horses we wanted-though NOT sale toppers-and who
would leave us alone and let us do our job. That was George Strawbridge, and
we got him two Eclipse champions (Informed Decision and Forever Together)
from the first five purchases.
Before that our recommendations had always been filtered through layers of
pedigree advisors, trainers, farm managers, racing managers, etc. There's a
Middle East proverb that the horse created by a committee is a camel. Then,
in 2008, Zayat Stables let us form a section of his stables with him, and
that led to our nine Grade 1 stakes wins in 2009, including Eskendereya,
General Quarters, Informed Decision, Forever Together and about 20% graded
stakes wins from the auction picks that met all our criteria.
Question: Besides Strawbridge and Zayat, who else are you buying horses for presently?
Well, I can tell you that of the 23 hips we just bought at Keeneland, none
were for either of those clients you've just named. And, for whatever reason
or reasons, many clients don't want their name used. So, I've learned to let
them use our name if they wish, and otherwise to be discreet. But I can tell
you that we work for a significant share of the top stables one way or
another now.
Question: Stride analysis and heart measuring are two important components of your selection process. Obviously with 2-year-olds you get a chance to analyze stride while a horse is breezing. How does that come into play at the yearling sales?
We analyze the walk. We've learned traditional and non-traditional skills for doing that.
Question: You and your partner, Patti Miller, have said heart size is an important element in assessing a horse's chance to succeed on the racetrack but has to be weighed with other factors, including overall size, temperament and conformation. How big a role does pedigree play in your analysis?
First, it's not just heart SIZE. It's a lot more complex than that, and it's
not one type of measurement of the heart, it's several, and that has to be
tightly in the context of a huge data base so you only compare it to other
horses of the same sex who are also similar within 30 days of chronological
age and within a tight weight and height comparison as well.
Second, PEDIGREE is important, just less important than more reliably
predictive sports medicine physical variables. That's the legacy of our work
in the early '80s with the U.S. Olympic Sports Medicine Committee on various
sports like luge, bobsled, shot put, and figure skating. Pedigree is really
a set of variables used to predict the probability of what you'll get
before the horse is born. After the horse is a physical specimen standing in front
of you, there are more reliable measures. And the fact that something may
have been unlikely in a horse because of its pedigree should not overrule
the observation of an individual who has that quality anyway.
And, of course, you have to be mindful of pedigree in determining market
values.
Question: Is heart size something that improves a stallion or broodmare prospect's chances at success? Where do genetics come into play on this?
Recently there's a lot of hype out there about equine genetic testing. But
horses are not fruit flies that can be used in genetic studies through
multiple generations on lots of offspring. The research data just isn't
there. Mares have one foal a year, rarely by the same stallion, and then
racing results are dependent on many, many outside variables, other than
physical characteristics, that garbage up the predictive value of what data
does exist. And even the physical characteristics required are multiple and
complex, hardly the stuff of one gene or two.
A real scientist's answer to your question on how genetics come into play
here, based on the research and data available now, is, "We don't know."
But we've seen mares with foals all of whom had poor hearts or all of whom
had good hearts though. And some stallions throw a lot more big hearts than
others. We would not breed using a mare or stallion that had a poor
cardiovascular scan result.
Question: Since forming EQB you've compiled an enormous volume of data. Can you touch briefly on some of what you've collected over the years and what you've learned that's had the biggest impact on your business?
Yes, we've collected more sports medicine data than anyone else in the
business. Our data is collected according to rigorous protocols designed by
leading university scientists. We sort and analyze it using PhDs in
statistics and SAS academic university statistical packages. And we've been
doing that for 30 years. That data includes 2-D echo ultrasound scans of
many heart variables and digitized slow motion videos of racing speed
workouts of real racehorses at major racetracks around the world. It covers
over 20 years and 50,000 horses, AND every detail of every race they ran
thereafter for many of those. Our published studies in major veterinary
scientific journals are available for download from our website
published, especially on techniques that did not work -- that some of our
competitors still sell.
What we learned that had the biggest impact on our business: Perhaps the
biggest impact from all this on our business was simply reaching a critical
mass of enough great horses we had looked at to have actually learned
something useful.
Question: You've said it's taken decades of trial and error and millions of dollars to become an "overnight success." What are some mistakes you may have made along the way, and what advice can you give to someone who is just getting into the business as a Thoroughbred buyer?
Again, you've asked two questions here. Perhaps our biggest mistake was
vastly underestimating how long it would take for the industry to stop
resisting and ridiculing what we were trying to do-and how much it would
cost us to really be able to do it. The next biggest blunder was trying to
use pure science without pure horsemanship or racing industry experience -
Patti Miller dug us out of that ditch.
Upon reflection, relying early on one "great scientist" or another was a
disaster, as was thinking some legendary horseman knew everything there was
to succeed. That wasted millions in horses and research, and many years.
There's no shortcut to industry experience and competence. And, no one
person in this game knows it all. Another mistake is falling in love with
some new technical finding and blowing its importance out of proportion.
It's more important to know where the hole in a horse is, than whether it
has the greatest something or other. And you have to be careful to avoid
letting theoretical knowledge overrule actual observation, or you get stuck
and don't learn any more.
Question: What does your stride analysis tell you about the different surfaces in racing today? Are some horses more inclined to excel on synthetics, dirt or turf because of their stride?
We have learned a great deal about the different synthetic surfaces and the
types of horses appropriate to each, and I really don't know how to simplify
an answer on that, except to say there really are "horses for courses."
Synthetic tracks are less tiring to most horses than traditional dirt
tracks, and often stabilize the hoof movement on landing more rapidly. This
increases the biomechanical weight bearing stance time per step, which can
result in either more stride efficiency and power, or more soft tissue
injury "pulls," depending on the gait of the horse.
Question: EQB spent a great deal of time looking at track safety and surfaces What opinion do you have of the different synthetic tracks? Do you think they are here to stay?
When a good new synthetic track is built, a new base is built under it. The
main safety problems with tracks that we identified many years ago with the
Morris Animal Foundation and M.I.T.'s pioneering Dr. George Pratt, were the
inconsistencies in the depth of the cushion, and in the hardness of the
base, caused mostly by different moisture content (drainage). And the dirt
roads below racetrack cushions all had potholes. For example, the ground
penetrating radar now available found stones, hard and soft areas, and
different cushion depths in the recent report on Santa Anita --- where the base
apparently was not done well.
So, new and modern bases can improve a track's safety regardless of the
cushion surface then put over them. Therefore, we really have no scientific
data of which I am aware on what difference the "surface" by itself may
make. That being the case, I won't speculate on the long-term future for new
surface types. But, we are pretty sure a new base with reliable,
maintainable, even drainage, and no pot holes, is a big help.
Question: What have you learned about the strength of the current market during the first eight sessions at the Keeneland September yearling sale? Are higher purses in states like Pennsylvania-and the promise of VLT money enriching New York's purse structure-bringing new investors into race?
We are looking for the home run horse for people who can afford to play that
game. That puts us into rare air, and maybe makes us a poor judge of the
overall market. Personally I have found that the type of really good
individual horse we pursue brings a profit to the sellers in any market. As
to "new owners" coming in, and why, I don't know about their motivations and
financial models. They seem to often be romantically smitten by racehorses,
and equally attached to some trainer or agent as their guru, so rarely do we
get a client like that for a nuts and bolts guy like me.
Question: What is your overall outlook for the current health and future of the Thoroughbred industry?
Apocryphally, Freud is supposed to have said that the definition of insanity
was doing the same thing over and over and expecting a different result.
That is a lot of what follows the hand wringing going on about the obvious
troubles in horse racing. There's probably some consolidation going on in
the industry in the medium term regardless, so everyone will need to be more
selective in the midterm.
However, since real estate is at a low point in its cycle, and so is racing,
I believe there is a real and powerful opportunity for a "change agent" to get
into racetracks now and prosper. It's a great, complex and invigorating
game, and a magnificent iconic animal.
My background, as you know, includes law and MBA degrees, and stints as a
successful turn-around CEO in textile manufacturing and in a retailing
chain. From that platform, we brought technology and a new business model to
the bloodstock game, and we've made it work for us. The last two years we've
aimed those types of data based technologies and business strategy
development modes at how to run a racetrack, and we think we've come up with
some breakthroughs. Rather than blab about them, we tried to buy the
Maryland tracks, and were disappointed when the auction was canceled. Now
we're preparing for another run at a major track. If we succeed, we'll let
our actions do the talking.
Copyright C 2010, Blenheim Publishing
