This would be an interesting paper to replicate
J. Shannon Neibergs and Patrick L. Vinzant
Journal of Agribusiness, Spring 1999, pages 37-48
Abstract
Thoroughbred racehorses are commonly characterized as unprofitable investments. Previous studies, grouping all racehorses together, estimate that over 80% of all racehorses in training fail to earn enough to recover the variable costs of training. However, these studies are not truly representative, because they fail to account for a number of factors affecting profitability. This study estimates expected purse earnings and profitability of claiming horses in Kentucky. Maximum-likelihood estimates of probability distribution parameters show that expected purse earnings follow an exponential distribution with a mean of $25,267. Profitability is best described by a Gamma distribution with a mean of $4,824. Of the 305 claims analyzed for profitability,
61% were profitable. The results indicate substantial financial risk associated with claiming race horses, but conclude that there are positive economic returns on average.
Truxton has had 10 horses - 7 claims and 3 private purchases. Of the seven claims, one was profitable, four lost money, and two are in progress. 1 for 5 is a far cry from 61%. Perhaps Truxton needs to fire their racing manager.
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