Archives for January 2014

January is when owners and managers of businesses often finalize their operating goals for the remainder of the year. Emotions, such as the well-known “irrational exuberance,” can interfere with establishing goals that are grounded in reality.

The Center for Applied Rationality (CFAR) offers research and guidance meant to help people make decisions that are driven by reason rather than feelings. One of the mental exercises suggested by CFAR for formulating credible goals is referred to by the oxymoron “pre-hindsight.”

Suppose that during January 2014 the general manager of a commercial horse farm, Sara, sets a goal of increasing farm revenues for the year by 10%. The pre-hindsight technique initially requires her to project late into 2014 and to imagine that the goal has not been attained.

Sara then must articulate how surprised she is over this disappointing outcome; the less surprised she is about the hypothetical failure, the more likely it is that the goal will not be accomplished. A low level of surprise means that she harbors strong reservations to begin with about one or more underlying assumptions or potential weaknesses in the action plan.

Sara says she is not very surprised. She subsequently explains the reasons why, such as the money she has allocated for sales and marketing is insufficient to attract enough clients whose yearlings need to be readied for auction; or her outlook for economic conditions in the bloodstock market is too sanguine. Once Sara’s concerns are identified, she, for example, might budget more funds for advertising and personal selling or cut prices–or her overly ambitious goals may need to be adjusted.

Goals should be recorded so they can be revisited, absent memory bias, and checked for realism. Quantitative goals are best in that progress in achieving them can be measured. Recorded measurable goals are more likely to get done.

Copyright © 2014 Blood-Horse Publications. Used with permission.

Amazon.com founder Jeff Bezos sparked a media sensation in his recent appearance on CBS’ 60 Minutes when he demonstrated how the company is testing drones, or “octocopters,” capable of delivering products weighing up to five pounds within 30 minutes in urban areas.

Various commercial uses of drones in the United States are fast approaching; the Federal Aviation Administration intends to issue regulations in 2015.

Agriculture, with its open spaces, offers one of the most promising applications for unmanned aerial vehicles. To illustrate, camera-equipped drones can scan fields and pastures for weed infestations and detect rodents and bugs. Herbicides, pesticides, fertilizers, and other chemicals can then be applied to problem areas rather than to an entire pasture or field, thereby rendering significant dollar savings. Filmmakers in Europe shot scenes from drones for the movies Skyfall and Smurfs 2; the cost was approximately $200 for a drone as opposed to $2,000 per hour for a helicopter.

It is not science fiction to anticipate drones flying over farms in Kentucky, Florida, or other places where horses are raised in quantity.

Large farms and ranches could also find it beneficial to deploy camera-enabled drones to monitor wide swaths of land and make sure that their horses are secure, just as police departments are integrating drones into surveillance activities and wildlife organizations are dispatching drones to track feral animals in their natural habitats.

In the same way, drones could be used by racetrack stewards to hover near on-track action for a better view than is possible with stationery cameras. Drones could be employed on racing telecasts, too, to provide viewers with unprecedented close-ups.

The Association for Unmanned Vehicle Systems International estimates that the commercial drone industry is currently a $14 billion per year enterprise; by 2015, it should grow to at least $82 billion annually. Expect to see some of this spent by racehorse farms and racetracks, as owners and managers devise creative ways to capitalize on the technology.

Copyright 2014 the Blood-Horse. Used with permission.

The movie Lone Survivor depicts the gallantry and heroism of a four-man Navy Seal team on a secret mission deep inside enemy territory in Afghanistan in 2005, and also the ultimate sacrifice of the men who lost their lives trying to save them. The movie is a box-office hit though it is emotionally wrenching to watch.

The sole survivor of the Seal team is Marcus Luttrell. In his book Lone Survivor, Luttrell tells of being raised on his parents’ 1,200 acre horse farm in Texas. He writes about the mid-1980s: “We had 125 head…mostly Thoroughbreds and quarter horses. My mom ran the breeding programs, and Dad took charge of the racing and sales operation…It was nothing for my dad to breed a good-looking horse from a $5,000 stallion and sell the yearling for $40,000.”

After the crash in the oil business in 1986, the bloodstock market plummeted. Luttrell said: “Hard-running colts and mares, which Dad had valued at $35,000 to $40,000, were suddenly worth $5,000, less than they cost to raise. My family lost everything, including our house.”

The Luttrell family–like many people in the horse business–had the fortitude to deal with the inevitable ups and downs of breeding and racing horses. That adversity, however, paled in comparison to what Marcus Luttrell would face in Afghanistan. Very few people could endure Seal training much less what Luttrell suffered in Afghanistan after his fellow Seals were killed in valiant service to their country.

Luttrell truly deserves to be referred to as a hero in a time when that term is used too loosely. In 2006, President George W. Bush awarded Luttrell the Navy Cross for combat heroism.

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On his SiriusXM show At the Races, host Steve Byk observed that New York has become more competitive with Florida in winter racing, owing to the incentives and purses being offered in the Empire State from a cut of slots revenues at Aqueduct Racetrack.

According to the Blood-Horse, the number of mares bred in New York soared by 43.1% in 2012 (compared to 2011). This was in contrast to a 3.8% decrease in mares bred in the entire United States. The average price for New York-breds at the Fasig-Tipton Preferred sale in August 2013 increased over 2012 by 15.9%, to $72,480.

If New York continues to be competitive with Florida in winter racing, it is likely to exacerbate the battle between Calder and Gulfstream for entries.

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Alex Rodriguez of the New York Yankees has been suspended for the entire 162-game 2014 season, plus playoffs, for using performance enhancing drugs and obstructing Major League Baseball’s efforts to investigate. Joe Tacopina, Rodriguez’s lawyer, stated that Rodriguez passed 12 drug tests, and MLB has not disputed this assertion. Rodriguez was convicted on the basis of testimony against him.

Imagine if a racehorse trainer were banned for a year for giving a racehorse performance enhancing drugs solely on the word of a groom or veterinarian, without the animal ever testing positive for a banned substance. Horse racing provides accused trainers with plenty of due process and requires that there is chemical evidence of misconduct.

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The death of European Group I and Breeders’ Cup Turf winner St. Nicholas Abbey from colic is a sad ending to his battle to overcome the fracture he suffered to his right front pastern in a workout at Ballydole in Ireland. After coping with the injury and ensuing complications, the prognosis looked so promising. It evokes memories of the rise and demise of the beloved Barbaro.

Copyright © 2014 Horse Racing Business