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1.Market Observations, 5.Troubled companies

31 Oct 2012 (AFR) – Poor return for Tinkler horseflesh

[COMMENT: This is another example of the impacts of the economic cycle during the down phase of the cycle. People become over-leveraged, get swept up with the euphoria of sky-rocketing values, and end up losing big time.]

(31 Oct 2012, AFR, p3, Matthew Cranston)

Tinkler takes ‘bloody big hit’ on horses

‘Troubled coal magnate Nathan Tinkler has sold some of his prized horses for up to 98 per cent less than he paid for them in an auction that was a bonanza for horse breeders. The racing industry anticipated the 202 broodmares from Mr Tinkler’s Patinack Farm would fetch a mere $1 million at the Magic Millions “unreserved auction” on the Gold Coast yesterday.’

‘Although the result was better than expected – the sale raised more than $2 million – Mr Tinkler couldn’t avoid taking steep losses on horses he bought only few years earlier. The value of breeding horses decrease over time as they become less fertile. “Nathan has himself a bit of extra pocket money now,” Magic Millions owner and retailer Gerry Harvey said at the sale. “But remember, what you have got here are some horses that Nathan bought for $200,000 and people are picking them up for $5000. Tinkler has taken a bloody big hit.” ‘

Read more at AFR.com (might need AFR login access)

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