Lexington, Ky. - There have been three significant booms and two baleful busts in the Thoroughbred industry over the past 30 years. Arguably the biggest boom came in the go-go years of the early-to-mid 1980s, when sales prices for elite yearlings, weanlings, broodmares, and stallion shares routinely soared into six figures. It seemed almost anyone could make money in the horse business, and many did, but irrational exuberance inevitably precedes busts, which in equine markets was precipitated by tax code changes eliminating various write-off provisions. By the early 1990s, average prices for yearlings and breeding stock compared to a decade earlier were off as much as 60 percent for broodmares and down more than 70 percent for yearlings. Horses no longer offered safe havens for parked capital.
The industry slowly recovered and eventually boomed again, but it left shattered aspirations and a sobering history for those who had considered it the next Alaskan gold rush. Some prominent farms, owners, breeders, bloodstock agents, and sales companies from the early 1980s are long gone from the scene - - victims of volatile markets, changing entertainment trends, and simplified tax codes.
And then there's Nancy Yearsley.
Fresh out of the University of Delaware with an English degree and experience in horse showing, foxhunting, and galloping Thoroughbreds, Yearsley took her first "indoor" job as a proofreader at the old Thoroughbred Record in Lexington when the 1980s boom was launching. Energetic, confident, brash, blond, and athletic, Yearsley then and now could be mistaken for a professional golfer or tennis player, but her stifled stint as a proofreader was soon exchanged for the volatile world of trading stallion seasons and shares. Operating out of a makeshift office at the corner of Mill and High Streets and continuing to gallop racehorses, Yearsley eventually was trading 400 seasons annually and employed five people. She founded Yearsley Bloodstock Agency in 1982 and later founded Yearsley Bloodstock Insurance, becoming one of the few U.S.-based female insurance correspondents for Lloyd's of London.
When the Thoroughbred industry headed south, Yearsley also headed south - - into Vanderbilt University's high-intensity MBA program, but this was before the Internet, requiring Yearsley to commute from Lexington to Nashville while still managing her insurance business. The relatively straight routes along Bluegrass Parkway and I-65 afforded opportunities to catch up on her course cramming but also had hazards: "I can't believe how many speeding tickets I got," recalled Yearsley.
Yearsley earned her MBA in 1991 and bought bi-coastal Grade 1 winner Flying Continental after that horse had earned about $1.5 million - - intending to re-sell - - but the declining stallion market resulted in her keeping the horse, who was winless in 1991. Flying Continental - - bred and originally raced by the late Jack Kent Cooke, owner of the Washington Redskins and Los Angeles Lakers - - was returned to racing by Yearsley, scoring four more stakes victories from Illinois to Kentucky to California and earning almost $300,000. Yearsley later stood the stallion at stud in California, precipitating a western expansion of her insurance operation and a second office in Los Angeles.
Yearsley subsequently got into the Quarter Horse market, traveled to Argentina and Mexico, and expanded her two-office Yearsley Bloodstock & Insurance, Ltd. enterprise into a breeding and racing operation that invests in mares, stallions, and racehorses - - typically fluctuating between 50-to-100 horses. Yearsley races on the Quarter Horse circuit at the premier tracks of Los Alamitos (California) and Ruidoso Downs (New Mexico) and claims to have won the largest purse in Quarter Horse history ($1.5-million). Her insurance division provides equine insurance globally, representing selected domestic carriers in addition to Lloyd's of London, and providing insurance for full mortality, transit, and stallion infertility.
Yearsley has seen it all. While in Lexington for Keeneland's 15-day breeding stock sale (November 3-17), she saw a market decline of more than 40 percent, eclipsing declines of 22 percent in 1986 and 34.8 percent in 1990. The Thoroughbred industry has been hit with a "perfect storm" of contracting world-wide economies plus contentious conflicts between racetracks and horsemen's groups over shares of burgeoning advance deposit wagering (ADW) pools, resulting in boycotts and missed racing days. The economic contraction was perhaps inevitable; the ADW conflict might be resolvable but would require significant changes in how the industry operates.
"I have been breeding and racing Thoroughbreds for 20 years, from River Downs to Del Mar," Yearsley observed. "I know the horse industry now has got to get everything right on every level." Perhaps more now than ever before, she acknowledges that the current state of the industry leaves certain questions burning in the minds of horse owners and breeders.
"With 55 horses in my current portfolio, will my returns pay my costs? Will I be able to afford umbilical stem cell storage (a new technology, storing foals' umbilical cords for future uses as 'repair kits')?" Yearsley asks. "Will I survive?"
At the same time, she knows that "odds improve with expertise" - - and with 20 years of experience under her belt, one could say those odds shine in her favor.