Adam Torres and Jeff Seder discuss racehorses.
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Show Notes:
How does investing in racehorses compare to traditional investments (real estate, stocks, precious metals, etc)? In this episode, Adam Torres interviews Jeff Seder, Founder of Equine Biomechanics & Exercise Physiology (EQB), discuss Jeff’s journey in horse racing and EQB.
About Jeff Seder
Founder of Equine Biomechanics & Exercise Physiology (EQB), which helps HNWI and entrepreneurs looking to get into the horse racing business pick and manage young, unraced thoroughbred horses who may then become champions.
Jeff has spent millions, including $7M+ of his own money, researching and refining the science of picking a champion #racehorse for 4+ decades and grown EQB to be one of the USA’s leading talent scout buyers for young unraced thoroughbred horses. They helped one of their clients go from start-up to being the leading USA racing stable in 4 years with a profit! This was even before the client made $50M+ from a racehorse they selected that won several world championships and became the first Triple Crown winner in 37 years. Several other clients have also had world champions.
Jeff disrupted the horse racing industry by developing a quantitative approach to finding the best racehorses, much of which has now been widely copied. His approach pre-dates, and is similar to, the one depicted in the Brad Pitt movie Moneyball, in which Pitt analyzes baseball players using biometric measurements at rest and while running, as well as the type of equations and statistics to demonstrate their value and project their potential accomplishments. The data includes slow motion films, organ scans, DNA markers etc.
Full Unedited Transcript
Hey, I’d like to welcome you to another episode of Mission Matters. My name is Adam Torres, and if you’d like to apply to be a guest in the show, just head on over to missionmatters. com and click on be our guest to apply. All right. So today’s guest is Jeff Cedar, and he is the founder of Equine Biomechanics and Exercise Physiology, also known as EQB.
Jeff, welcome to the show. Thank you for having me. All right, Jeff. So just to get us kicked off here 1st things 1st, how did you get involved in equine industry? Like, where’d all that start for you? I took a ride on a blind date at a rental stable with a girl 1 day in May when I was about 27.
And instead of falling in love with the girl, I fell in love with the horse and I became obsessed with horses, taking lessons and ended up buying a horse and then a farm and doing my thesis. I was at a joint MBA JD, a law and business degrees at Harvard and before they even had the formal program and I did my thesis on the horse racing statute laws in Massachusetts.
I was riding every day. I wanted to find a way to be outside and be with horses. And it looked like a way I could earn a living because horse racing, well, 99 percent of the people were losing money. They were doing it the way they did for 300 years. Thought I can bring the management.
I was pre med before that at Harvard. I said, I can bring the modern management and science to a horse racing, and maybe I can make some money. Yeah, I want to stick in those early days just a little bit longer because I think this is fascinating. Like , what drew you to horses?
When you were there, like, do you remember? Like, what was the, like, you show you fall in love and obviously you get deeper and deeper. But what was some of the fascination? Well along the way. Well, it was fascinating to begin with. I just love always loved animals. I used to remember when I was like 10 looking out the window.
I was practicing my violin. I was looking out the window at a squirrel in a tree and my mother came in and said, do you want to play with a squirrel? And I said, no, I want to be the squirrel. I just always, I had dogs and I always loved animals. And then riding, I got so, I got really good at it. I was jumping six foot stone walls out, running around and fox hunting and steeplechasing and stuff.
And I had this foresight that I really loved. And you know, I don’t know people who don’t know what have with animals. I don’t know, but I had a bond. I just thought go right. He did. You know, we were just a bonded. And when I first had my own farm, I moved him to that farm instead of a rental stable.
I put him in a stall and I threw my arms up and I said, Tony. We’re living together and I wanted to be, I originally got out of law school and business school. I took a job at in Manhattan at City Corp and international financing and I was there for about six months and I just, it felt like I was always indoors and they had in the City Corp new building at that point.
They had a mural that was like three stories high in their central atrium, which was the cafeteria of Pennsylvania farmland. And I was looking at it. So I said, what am I looking at? I could be living it and I quit and I couldn’t fit in a farm and then I started. If I hadn’t been, if I’d known it would, how long it would take and how much it would cost, I would have never done it.
Then I managed to get myself to, By accident in with a brand new science stuff the United States Olympic team was just starting their sports medicine stuff to try and compete with these Germans. And this is that as a young lawyer, I got involved in that. And so I got, I got to see all the technology that was being developed and thought of about training.
And so I began and then it was fascinating because one of the first thing I learned was the data didn’t exist. I went around to ask experts, the best veterinarians and the luminaries in the fields and people at MIT and doctors at Harvard, and they didn’t exist. You know, everybody gave me answers, but it was all based on like ponies on treadmills at labs, you know, they didn’t know And the equipment to get the data didn’t exist So if you put a human hiring meter on a horse, it doesn’t work Right doesn’t matter why so I had to design my own chip and get it from made by hitachi Like before there were What year is this, Russell?
What year is this, Russell? I thought so. That’s why I’m over here thinking to myself, like, you’re pioneering this stuff. This is early days. It was like 20 years before. There were no PCs. There was nothing. I had to get chips made. I had to use defense contractor black box shit. I made the first thyroid meter that a jockey could carry that was accurate.
And I found that to be, you know, The leading equine cardiologists in the world had no clue what the heart rate of horse the race horses were. They thought it was like 120 beats. It was twice that. Wow. And their resting rates were 25. Wow. And they could go from 25 to 120 when you walked in the stall without turning a hair.
So not only did their hearts go twice as fast as they thought because they were so big, they thought they didn’t, they, they were more. They were volatile. They were go up and down faster than anything a human could do. Wow. And then they had interval training for humans. And I found out that wasn’t going to work because I did, I did all the math.
I had horses in pools with masks over their faces to catch the gases, to see this, that, and the other for VO2 max and all this training shit that was going on with humans. And you had to catch all the gases and then analyze them. So in a human, they have a big thing called a spirometer, which is like a big, water heater and you catch the gases.
So we tried that and it was full in like a second. And so we chained two of them together in a filled wagon, three of them together and it was full instantly. And we said, so we got a weather balloon. So it was big enough to hold all the gases. And then we looked at each other. This is ridiculous. Why is the horse moving so much air?
And if he is, why do we care about his lung capacity? Clearly something’s going on that has nothing to do with oxygenating his blood. It’s vastly beyond that. And it turned out they’re cooling themselves by panting like a dog, not just by sweating. So they have lung capacities that are vastly beyond anything you could need for the race.
They’re born with it. And there were others, I learned a lot out of this. We looked at their heart. They were talking about, this is just, I’ll try to be quick about it, but there were guys who listened to the Hearts of Horses and there was a guy in Australia that took EKGs and he measured between peaks on the EKG to do the mass of the heart.
And they claim the secretary had a massive heart when they did his autopsy and he’s 20 years old. So I looked at that, you know, I was a pretty good mechanic too. I was a motorcycle mechanic and racing nut. And I looked at this thing and I said, this is ridiculous. They are doing this with a little machine, with a little paper tape, in barns.
In these places with the currents crappy and you know, vacillating all over the place and it’s a little motor that’s running that tape is going faster or slower depending on the voltage and they’re measuring the distance between the peaks. That is silly. So I said, let’s do it directly with ultrasound.
So then we tried doing it with ultrasound and everything there. We had to invent the first portable ultrasound machine that could go into a stall on a horse. Wow. All the machines like that were modeled on our stuff. And then we had all these vets that tell us, how do you measure a heart? And we tried it and it never gave us the same results.
So finally we ended up on the other side of the horse. We can identify markers inside the horse with ultrasound and we could get reproducible results that were accurate. And it changed the whole way they did echocardiography in horses. We had to invent the equipment, get the data, and then we did 10, 000 horses over, or 12, 000 horses over 10 years, And we found that like, to a point.
a statistical absolute certainty that 99 percent of the really good horses had in the top 20 percent of the size, those thickness of the left ventricle in their heart. And it went on from there. And every time I would discover something, it was, it was a thrill. Plus when I finally got to do this, which was like 20 years later, right?
The Kentucky Derby, you can only be once in your life as a three year old horse. Twenty horses qualify by winning the top races, this and that. Out of what was a full crop of like 30, 000. Most people may get in once in their lifetime. I’ve had a horse, or more than one, that we bought as an unraced two year old, below auction prices, almost every year.
One year we had a whole court with five horses in the gate that we bought for people as babies. We’ve been second place, we’ve won it once, out of our program came the first triple crown winner in 37 years in 19, in 2015. So we’ve proven it, but it was always a thrill. And horse racing is thrilling.
If you bet 2 on the horse, if you don’t know anything about it, I guarantee it gets really interesting. Yeah. Almost anybody, anybody. And, and if you’ve got all the investment in this technology and picking it and da, da, da. For me, it’s always been a thrill. My first client. I went to, he was a leading guy, finally got a guy, he was a big guy in the industry, and he had 200 horses, and he agreed to meet with me, and I gave him the whole spiel, and he said, I don’t understand any of it, make one recommendation.
I said, you don’t understand, it’s a lot of things together, it’s a program. He says, no, make one recommendation. So I said, okay, here it is. You’ve got a brand new sire you’re trying to promote. You’ve got a cult by him. If that cult does, you know, well, in major races, you’ll have, you know, I’ll have a sire with a lot of money.
So I want you in a month. I want you to enter Nolan’s cat named after his grandson in the Belmont stakes and he burst out laughing. Belmont stakes is the third of the race of the triple crowns, a mile and a half. They almost never go a mile and a half in any other race in the United States. And this horse, he said, that horse has not won a race.
He has not won a race. I said, he’s slow. And I said, yeah, but he never slows down. And the thing about the other thing I had learned from the Olympics was about fatigue curves and swimming and other sports in horse racing. When you see a horse passing everybody in the stretch, and it looks like it’s terrific if it’s on the dirt, he’s just slowing down less than the others.
They’re all slowing down. And you can nail the rate. They slow down. That’s almost like a fingerprint to a logarithmic fatigue curve. And then you can extrapolate it out to see what the time would be on longer. races. And this horse had a really flat, but big curve. So he wasn’t slowing down. I said, he’s slow, but he doesn’t slow down at the end of a mile and a half.
He’s going to be right up front with the best horses in the world. So the guy said, you’re on. So he did it. And the night before in the racing form, they had the analysis for this. The classic race and this and that and they said, you know, this horse has got a chance because blah, blah, and this trainer and I said, and then there’s the jokers and the idiots.
And of course, we were one of those. They never come on. Then the next day. Okay. So I’m at the race. And the horse is in the gate and the trainer, who’s a famous trainer is telling everybody the press. It’s not his fault. The horse is here to command performance, right? It’s this moron here, me. So they come out of the gate and of course he’s dead last and I’m ready to hide under the table.
And he’s trailing, he’s trailing the field and I’m getting the looks, right? Then about halfway through the race, he starts to pick up speed up. He starts to catch score. He’s not speeding up. Actually, he’s not speeding up. Everybody else is just slowing down and they’re all, and then halfway through the race, it looks like he’s catching up to the field.
And then we’re about three quarters of the way away. And he’s passing horses like, man, we get to the head of the stretch and he’s coming. And by the end of the race, he, if it had been another two strides, he’d have won the damn thing. He was third. So now he has placed in one of the most prestigious races.
Yeah. In the world, they call it a classic race. His sire is now no longer going to be laughed at. His first crop is produced a classic competitive horse. And just to prove it wasn’t silly, he did it again in a million dollar Louisiana Super Derby like a month later. So I got the job. And then I helped him out and we had got him low odds horses, the Kentucky Derby, like two years in a row, bang, bang.
Right. And then a guy called me up who was from Egypt who wanted to get into this sport and he was going to spend a lot of money and he wanted to know if I could help him. And I said, you bet. And then he turned us loose and we created the Phenomenal record. You know, most people have one or two grade one winners in a lifetime.
We bought 20 in like six years and we did it. They’re all spending a million dollars for the top horses. We were spending 40, 000, 50, 000, 100, 000 and then we bought the damn of what, who became the triple crown winner. For 200, 000, she got hurt, but it’s 200, 000, not 6 million, which is what they paid for the top broodmares of the most recent auction.
Right? And and so it was just from there. It was a whirlwind, but then he was a brilliant guy and a passionate guy, but he was. The Arab Spring came and the Egyptian pound got devalued 50 percent and all his partners in the big businesses in Egypt, you know, he lost them in the military. So he went bankrupt and we lost him and people thought we bankrupted him.
He had invested 40 million and we had turned it into 64 million in like six years and that was before the Triple Crown winner who was probably worth 50 to 100 million. You know, anyway, we did it. So it’s not a theory anymore. And I published in refereed major. Scientific veterinary journals, massive amounts of data, you know, these huge 10, 000 or 12 again and again and nobody reads it.
So I used to drive me crazy and I finally said, you know what? That means I will be preserved my edge, right? Yeah. What the hell? What do I, I went to an auction last, the well, just recently, and there were horses, there were 11 of them, one for a million dollars, yearlings, and one of the guys who bought them was big in the industry says, well, there were 11 horses, the one today for a million dollars, and I know the only one I’m going to be any good.
I hope it’s mine. And I was thinking, God, He knows he’s got a 9 percent chance. If I, you know, I could give him, I can give him a 30 percent chance, you know, for average money, not for a million dollars, for 40, 000. But they don’t, and I’ve proven it, and I’ve published on it, and they just don’t, you know, it’s so insular and so, So tradition bound and so Why do you think that is?
You think it’s just tradition? Like, or guys data. These are people, they don’t, it’s a lot of it, it’s because it’s so much fun. And the social thing is fun. And they’re showing off like buying a McLaren car for a million and a half. They don’t give a damn. You know, they, so if they have to buy 10 horses, they have to buy 10 horses at a million dollars and get one That’s really good.
So they’ve lost their ass. They don’t tell anybody that. Right. Mm-Hmm. , they don’t care as long as they got the good one. But that’s not, but I do care. And the guys I had do care. So what I’m doing now is I’m bringing it in house. I’m not gonna do it. Are you using like a, are you doing like a fractional model where people can get involved like on a fractional basis or like, well, I’m decide that I just, I’ve got three offers of.
About an awful lot of money to create a stable, and I probably would bring in people as partners if they want to come along. Yes, I probably would do that. You can just to backtrack just a little. If you want to get into horse racing, there’s a few things that you really got to know. First of all, it’s caveat emptor in spades.
There are a million really nice. Guys who sat even veterinarians guys who sound like they’re really knowledgeable and they’re awful. They’re awful. And there’s an awful lot of technology guys selling technology and statistical this and that. And most of it is absolute garbage. So you really have to be careful and you can’t really, you have to check references and you can’t believe because they say there have some biomechanics.
Most of it’s crap. That’s number one. We, you know, because they didn’t have what we had, which was 20 years and millions of dollars of private research. So that’s number one. Number two is if you’re only going to buy one horse, obviously it’s a, it’s a lottery ticket. A million things can go wrong, even if they’re a great horse.
If you’re just trying to have fun, fine, buy one horse, about 40, 000. Don’t spend a lot more than that. And it’ll cost you about 4, 000 a month to train it with a good trainer. And if you don’t get a good trainer. I don’t care if they have secretariat. Most of the trainers cannot win major races and they think it’s because they don’t have the horses and it’s not.
That’s not the reason. So you really need people who have done it and you can find them, but you got to make the effort. The data is out there in the Internet. If you want to do it as a business, you need a stable, then we can make the odds work for you. You know, you need to have 20 horses or something.
So now I’m just trying to think about like, okay, if somebody’s a novice and they’re getting, kind of started in this, like, how do you on the fractional side or whether it’s, That or whether it’s even like just thinking about, you know, how to get into the business.
I feel like it can be a little bit intimidating, like go into that a little bit. Oh, it is intimidating and it should be, unfortunately. Well, you can do partnerships. Most of the partnerships are, you know, the overhead of the people running the partnerships is so big and your odds are not very good. So you may have a good time and I’ll educate you, but you’re unlikely to make money, even if the horse is successful.
And then but that’s one way to educate yourself. Just start slow and don’t expect to make money in the beginning. Another way is you just got to find the right people. And if you talk to us, we can, we can find out what do you want to spend? What do you want to do? This and that, you know, we won’t, we won’t.
Put you with people who jerk you around. Yeah, I know there’s other good people out there, but most of them what they don’t have, there’s good people out there, but what they don’t have is what we have is all that big data analytics on top of the traditional horsemanship. That’s Jeff. I got a funny track record and I got a record of 50 major horses for not a lot of money.
So Jeff, , I got a story for you. I’m a big proponent of like, and I talk about this on the show pretty often that we’re exactly where we’re supposed to be at the right time, like physically, like who knows about the long term or this or that. I’m not talking macro. I mean, like my body, I’m doing exactly what I’m supposed to be doing at this moment, whether I know it or not.
So, hilarious, what’s funny to me, I don’t know how funny you’ll find it, but so I, literally, before I started this interview, maybe an hour ago, I get a call from one of my buddies who flew in from Miami pretty randomly, and he says, hey, Adam, you want to go to the horse races on Sunday?
And I’m like, sure, I’d like to go. Man, I haven’t been to a horse race in six years minimum, and I didn’t even know this person had ever gone to a horse race in their life, so I’m pretty excited, and then I get to talk a full day. I just enjoy it. I forgot, like, how much I enjoyed it, and then I got the opportunity to go, and I’m like, oh, yeah, I’m going.
That’ll be fun. It is fun, and you know what? I can say bet 2 on each race, and you’ll see how much winners it gets. There’s a million funny films and funny stories about horse racing, really. One of my favorite lines is, It was a great day at the track, I broke even and I needed the money. There you go. Take it.
So Jeff, man, first off, this has been a pleasure having you on the show today, to talk to an expert who’s been in the game this long, and really a pioneer. I can’t, like, when you told me, Like when you’re getting these chips done in the early days, late seventies, or roughly that time period, like that’s, that’s insane to me.
I love it. And I love that you’ve been on this track and figuring it out. If somebody’s, if somebody’s listening to this and if they want to connect or follow up or just learn more about your programs or your work, how do they do that? Well, they can go on the internet to EQB like echo, queen Bravo, eqb FYI no.com.
If you do do mm-hmm eqb.com, you’ll get a bank in Canada where eqb.fyi, and it pretty much tells the whole story. There’s links to contact us. There’s you can download copies of our extensive published research and major scientific journals and lots of data, you know, , there’s links to podcasts where we’re interviewed and go into detail about what we do and how we do it and you can call us and we’ll give you references and we’ll just talk horses.
, I love, I love horses. I love the races, but I also love the farm. I love it when the babies are born and they’re out and running around in our, out in the countryside with beer. You know, just, there’s so much about it, from the animal, to the farms, to the racetrack, to the people. A lot of the people are just characters, and they’re fun to be around.
They’re passionate. It’s me, and it’s not a cubicle in Citibank, in Manhattan. Thank God. That’s where I start. I love it. Well, thanks again, Jeff. And to the audience, as always, thank you for tuning in. If this is your first time with Mission Matters and you haven’t done it, make sure you hit that subscribe or follow button.
This is a daily show. Each and every day we’re bringing you new content, new ideas, hopefully new inspiration to help you along the way on your journey as well. So again, hit that subscribe or follow. And Jeff, again, man, appreciate you coming on the show. Thank you so much for having me. I really appreciate it.