Thought I'd copy this stuff over here, before they decide to take it down. I have no vested interest in this one way or another.
****************************************

A Public Service Announcement

(or how I learned to stop loving Graph Racing-East, West, North and South)



Having followed the fortunes of TGJB's Rising Graph-East Stable (RGE), I was somewhat astonished to learn that a new Rising Graph Stable-West (GSW) offering circular was being distributed. In the spirit of "total honesty" that such SEC approved offering circulars must adhere to, I state here that I have no respect for the "figures" that TGJB produces and that I also, for a variety of reasons, harbor a significant personal animus toward JB. The facts cited herein, however, are easily verified through reading the circular and making use of DRF PPs and racing stable records.

Because it is a required disclosure, the GSW offering has a brief mention of the existence of RGE and its results up to the June 24, 2002 date of the offering. "...(RGE) has purchased...five thoroughbreds and currently owns four horses that are racing. ...(These horses have) started in 13 races, with one second and three third place finishes, plus a fourth place finish in a Grade III stakes race." While it may be said that this account of RGE's results was technically accurate, it is also true that even by the date of the offering the results of RGE were bad enough that the description given was laughable at best.

Of the five horses purchased, one of them (a cheap claim) had died in a freak accident for which TGJB obviously is blameless. The other four horses (purchased at ~$100,000 each, I'm guessing) were not doing all that much better. One had already been dropped in for a $20,000 claiming tag with poor results and no claim. Another had run only once--beaten a bushel of lengths as an unbelievably outclassed entrant in the Arkansas Derby--and had then been laid off due to physical problems. The other two had run some fair efforts, but nothing to indicate that they were worth anything near what they cost. I have no way to know (except for Guppie's Secret) what these horses looked like on TGJB's numbers when he bought them, but they must have looked a lot worse when the GSW offering was made. Now that RGE results have completely collapsed, I am guessing that no further updates will be provided to potential GSW investors.

As of December 1, 2002, Rising Graph Stable has a single win--Guppie's Secret in a $20,000 NW of two lifetime claimer. Fit Performer, who has accounted for 1/2 the stables earnings, ran poorly in her last effort and hasn't run for eight weeks. The fourth horse, Chirimoya, is still showing up with mediocre efforts and may yet win a race (particularly if she is spotted a little less aggressively), but she'll be lucky to end up being worth half of what she was purchased for.

I'm appending the Ragozin SHEETS on the four major RGE purchases for comparison purposes. SHEET readers can see that Guppie's Secret had a fair line for a strong trainer but just wasn't fast enough for a six figure purchase (unless you did a big short/long for the 2/28 OP win as I would guess TGJB did to get the TG number that led him to think a graded stakes was the next step). Power Choice and Fit Performer had recently run significant new tops that represented a lot of development and figured to be the end of the line. Chirimoya had a fair pattern and a decent number for a 3yo filly six figure purchase, but she also had developed quite a bit and was off a top that could easily lead to her being set back for a while at least. Only Chirimoya was a possible purchase off the SHEETS.

I would estimate that RGE has had gross earnings of about $64,000 as against expenses of about $104,000 including trainer and jockey percentages and the quixotic $10,000 entree fee for the Arkansas Derby runner. There was also a $20,000 organizing fee that TGJB charged the investors and ~$18,000 additional management fees that are owed TGJB for his 9 months of unparalleled stewardship. This adds up to a operating loss so far of about $80,000--and this is assuming, as I've been told, that TGJB has waived his % of the gross income until RGE turns the corner (or hell freezes over, whichever comes first). I would estimate the remaining horses to be worth ~$100,000 (generously in my opinion) which means that as a conjuring trick TGJB has turned ~$600,000 into ~$200,000 in only 9 months of work.

Proposing another stable on the ashes of the first one would be incredible enough on its own, but the terms of the offering are such that P. T. Barnum would have been envious he hadn't taken his shot organizing a stable. First, as has been mentioned, the investers pay ($20,000) for the privilege of being lured in. Maybe this is the accepted practice for private offerings, but it strikes me as rubbing salt into the wound. Second, TGJB takes a monthly fee of 0.3% of the stable's capitalization (just under $2000 a month if the minimum $625,000 capitalization is met). Third TGJB takes 10% of the gross earnings (excluding capital gains on sale of horses). Fourth, TGJB takes 20% of any capital gain on the sale of a horse (with no deduction, naturally, for any capital losses from the sale of other horses). These charges are obscene--even if the stable were reasonably successful, the investors will lose while TGJB laughs all the way to the bank. It will be of small solace to the investers in GSE that the results are so bad that the worst of the extortionate TGJB potential fees will not come into play.

If I may digress for a bit, there was one other small part of the offering that caught my attention. In the section that trumpets JB's successes in the horse business TGJB writes as partial testimony to his greatness: "Before starting Thoro-Graph, Mr. Brown managed the Dennis J. Heard Stable, which at the time Mr. Brown took over in 1976, consisted of 2 horses. In 1979, under Mr. Brown's direction, the stable ranked third in the country in wins."

There is one interesting omission in that statement--at the time of those successes JB was using the Ragozin SHEETS to achieve those positive results. Even more interesting is what happened after JB left the SHEETS to go out on his own and Heard decided to dissolve the stable now that the SHEETS weren't going to be used. JB ended up with almost all the racing horses and breeding stock and formed Badlands Stable, whose results were so bad that in a period of a few years the stable lost most of the value that had been built up while it was based on the SHEETS.

I hope that some of this information gives a little pause to anyone rushing to invest in any of TGJB's schemes, but I guess that I can only really hope that some of H. L. Mencken's observations prove not to be true in response to GRW.



Len Friedman

click the link below to get the Ragozin Sheets for the 4 horses mentioned in this article.

RGE's four major purchase



burunduks@usa.com