I found this a few days ago and have no idea what to make of it.
In theory it sounds like a brilliant idea but the practical execution of it is beyond me, then again I didn't understand SIV's and CDS's and I hear those were a resounding success.
The site portrays the setup as a fractional ownership of racehorses but then there is trading involved. It is in the beta phase I guess but it still does not make sense to me. In the fractional aircraft business one does not trade one's share in the aircraft. The whole purpose of the fractional ownership program is to allow one to share a corporate jet for a "fraction" of the cost required to own one entirely. In turn, one gets some fixed number of hours to use the aircraft throughout the year and does not have to deal with the hassle of managing the aircraft maintenance and staffing issues. There are also a contract and a monthly management fee involved.
How would you assure the integrity of your transaction? I guess corporate aircraft are not fungible but I wouldn't imagine that horses are either. Any ideas?
23 June 2008
They call it BLOODSTOCK for a reason
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The Bid
Greatest horse ever to look through a bridle
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2 comments:
I believe that, like any investment, when you buy into a horse, you will want to buy when it has done nothing and sell when the horse has proved itself. Think of the horse as a start up company. The price of it's shares will depend on how well the company does. So to with the horse. The stock may be doing great and then it's technology becomes obsolete and the stock plummits....like a broken leg on a horse would render it's shares worthless.
That's what I think. And it could work. But it would take time to educate people on what make a horse a good investment. Then there will be a whole new jargon about horses like "it's p/e ratio is high" or "it's trading below book value" "bonds are up, stocks are down...but boy I'm making a killing with BB (that's the tradinng symbol for Big Brown)" Who knows.
I probably should have explained it better. I understand the concept and think that in theory it is a good idea. What I don't get is the actual method of execution.
Will blood-ex be the exchange and have a ticker for each horse? Who are you trading with and how liquid can this possibly be? Where is the assurance of execution? If the owners have to place their horses up for offer then you are probably going to get the pick of a mediocre bunch of horses because you wouldn't want to split off a share of a horse that you "think" has potential.
I know, nothing is guaranteed but there are phenotypes and performance criteria that point toward talent. Had Magnier and Tabor offered up The Green Monkey after they bought him, that would have been a good sign that he was done.
Thanks for reading.
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