The owner of Blue Chip Farms on how what he learned at the racetrack at a young age has guided his whole life.
by Murray Brown
Tom Grossman grew up in New York city. He was a racehorse junkie for as long as he can remember, but it was of the thoroughbred variety, not standardized.
His father loved going to the track. So did Tom, who usually went along with him. Tom recalls his father being a significant bettor — one who rarely let emotions get in the way of choosing his picks. He worked with the numbers and tried valiantly to get them to work out in his favor.
As with all successful gamblers, he looked for value.
Tom distinctly remembers he and his dad going into a very crowded paddock at Saratoga. He remembers his father saying to him at the age of 10, “Look around you son. All you have to be able to do is be smarter than 15 per cent of this crowd to be able to make money here.”
Of course, both realized that it was not quite as simplistic as that. But it wasn’t all that difficult either if you paid attention to all things, both big and small.
Tom says that he learned many of his life’s lessons — and attributes much of his success in the “real world” — to what he learned from going to the racetrack at a very young age.
The bottom line was to determine what the risk/reward ratio was and to abide by the results obtained from doing so.
His first job “on the street” was working for Goldman Sachs before it became the huge behemoth it is now. He rose through the ranks and eventually headed his own department where he groomed several young people to success in their chosen profession.
It was in doing so that he came to realize that not all of us are capable in all areas. The genius on Wall Street might be so because he or she is proficient in a small area where he ranks ahead of those who might have more socially desirable traits. However, that one area might surpass all others in terms of success measured by monetary gain.
He was a schoolmate and good friend of Scott Kimelman, whose father Michael (AKA The Chief) and grandfather Oscar (The Big O) together with Bill Brown built Blue Chip Farms into one of the top breeding farms in not only New York state, but also the world.
Scottie did his best to switch Tom’s allegiance from the thoroughbreds to trotters and pacers. Although Tom still loves the thoroughbreds and has some involvement there, he has gone over to “The Dark Side”.
Tom credits The Chief as being one of the wisest and most assiduous people he has ever known in just about every venue of life.
He says that one should never underrate The Chief’s ability in just about every field that he enters.
One thing that he told me about The Chief was that when Warren Buffett was on his way to stardom, it was not unusual for him to park a considerable amount of his large portfolio under Mike Kimelman’s management.
I remember Mike’s dad Oscar telling me one day after he had a scotch or two, “My son Michael is likely to come up with 20 new ideas. Nineteen of them might be crazy or pure nonsense, but the remaining one will be the one that knocks the ball out of the park. If you played all 20, you will usually come out ahead.”
Back to the horse business and Blue Chip Farms.
Tom was in a tax situation where he was maybe doing a little too well. The Chief told him “I’ve got the perfect vehicle for you to stop giving all that money in taxes to the government and instead have some fun with it. I’m going to sell you Blue Chip Farms.”
Thus began Tom Grossman’s career as a serious investor in harness racing.
Within a very short period of time, Tom realized that horse breeding is a very capital intensive business. You have to spend money, sometimes a whole lot of money, in order to make some.
Thankfully, at that time, Grossman was in a position to do so.
He quickly realized that his broodmares were getting older. He needed to and did invest a lot of money in young fillies who would eventually become the nucleus of the broodmare band.
He bought major positions in the stallions Bettors Delight and Art Major and ended up making a whole lot of money for himself and anybody associated with them.
He bought Art Major at three. Most people told him to retire him at that age. The horse had done enough. He would undoubtedly get a full book and over a relatively short period of time would pay for himself and more.
Tommy instead decided to roll the dice and bring him back for his 4-year-old season as had also been done with Art Major’s sire Artsplace.
Although he did not sweep the year as Artsplace had done, he came darn close. Tom looks back on that season with the fondest of memories. His dad was in declining health, but managed to be strong enough to share the winner’s circle experience with great joy with his son at each of his innumerable victories.
Bettors Delight has turned out to be an epic stallion. At the latest count he has sired an astounding 41 millionaires.
He is definitely in any conversation concerning the greatest pacing stallions ever.
Grossman said the person shopping for standardbred yearlings has a good chance of making money, if he does things right and fortune falls his way. In the thoroughbred business, such a person has zero chance unless that person is incredibly lucky and finds that needle in a haystack like a California Chrome.
It all comes down to numbers and risk/reward.
I asked him about Chapter Seven and the extraordinary horses that he has thus far produced.
Are you surprised? I asked.
“Of course” he said. “That kind of horse comes along very rarely. They are a once in a generational product. They influence and sometimes change the breed.
Blue Chip Farms has had three of those stallions in Most Happy Fella, Bettors Delight and now Chapter Seven.
Perhaps I am being slightly premature with Chapter Seven. But I don’t believe so. If anything, things will almost certainly change for the better. In his first few crops, he got very few “A” quality mares of the type that Muscle Hill and Father Patrick, got from the get go. Now he is getting them. His next three crops should move him up even higher than the previous ones did.
What few people might realize is that Grossman is also deeply involved in another equine pursuit. He breeds and sells show horses.
Show horses demand more patience than standardbreds. He raises both breeds together with an occasional thoroughbred until they are separated as yearlings. The show horses then go into a multi-year preparation program until they are sold to various buyers all over the world. Some of them might be as old as 6 or 7 before they leave the farm. Tom assured me that in some instances it is well worth the wait.
He says that he got very lucky when he was advised by a very astute horseman to purchase a mare by the name of Sapphire.
Sapphire became a multi-Olympic champion. Many of Tom’s successful show horses trace to Sapphire. He purchased Sapphire on the advice on the advice of Barney Ward, a man he still considers the greatest horseman he has ever known.
Before entering this conversation Tom said that no questions were off limits, so here we go.
You are often accused of associating with — for lack of a better term — people considered unsavory types — people such as Josh Marks and Rene Allard who many consider to be detrimental to our sport. What do you say to that?
“When Andy Grant placed me on the board of the Hambletonian Society, part of his mission was to change the feeling that the Society was a group of elitist old men who didn’t know or care of most things relating to the business other than protecting the status quo. I felt that part of my mission was to recruit some young overnight racehorse trainers and get them to realize how much opportunity there is in the yearling game. I tried my best to do that. Some worked out. Others didn’t. Some are still in the learning process.
“I might have been somewhat predisposed to getting involved with some of these guys because I have an older brother with issues similar to those of Josh Marks. On the street and throughout life, if I’ve learned one thing above all others it’s that nobody is perfect. Some of the so called ‘bad guys’ can be redeemed, others cannot. Some of them were never bad guys to begin with. The ones who could not be redeemed, have hurt me and my businesses. One never knows until one tries. The one thing that Josh Marks and Rene Allard possess above all others is that they are both great horseman. Lots of accusations have been made against both of them, very few, if any have been proven thus far.
“When I worked with Josh, I was with him every day. I jogged alongside him. I watched him working with the horses. I thought he was well on his way to becoming a good citizen. Then when he got up north, his demons took over. I believe that at heart he is a good person.
“Josh Marks has numerous personal problems. There are times when he has been able to overcome them. There have also been times when he’s jumped the fence. There is nobody he has hurt more than himself. I have never seen him mistreat a horse. The one thing I have often seen is him working hour upon hour with a ‘problem’ horse trying to find the key to making him good. His patience has been remarkable in that area. I’ve often thought to myself, if only he was as patient and took care of himself that well.
“Rene is somewhat the same. He is a remarkable horseman. He works extremely hard. He has an incredible memory. He knows every horse he has ever been around — how they were equipped, their likes and dislikes. I have asked him face to face with his wife and children present, ‘Rene can you swear to me that you haven’t used any blood builders on your horses?’ He put his hand on his son Leo’s head and said, ‘No one in this entire world means more to me than Leo. I swear on his life that I have never raced a horse using blood builders.’
“I realize my allegiance to these guys has cost me lots, maybe millions of dollars. I also realize that being loyal to some may have come back and bite me in the ass, but that is who I am.
“When I first started training horses I was told by several not to give my horses to Ray Schnittker. I was told among many other things — he is a horse destroyer, he will ruin your horse, etc. I gave them to him anyway and we did pretty well.
“Today, that same Ray Schnittker is revered by many and cited as a positive example of what a horseman should be. There aren’t too many out there who are a greater credit to harness racing than Ray Schnittker.”
Blue Chip Farms is far and away the biggest and best known breeding farm in New York. You are often criticized for your stance on insisting that mares be inseminated in the Empire State. The argument is by doing so, you are making things far more difficult and expensive for your out of state clients. You are also preventing the growth in both quality and quantity of the New York-bred horse. You are in effect preventing some great stallions and certainly hampering the quality of good mares being sent to be bred in New York. The fact is in many cases the mares are just in the state for a cup of coffee anyway. They are trucked there, inseminated on the van and shipped back to their resident state on that same day, or with some, they are decamped for a few days during their heat period and then sent home. Many breeders will just not subject their best mares to the possibility of injury, especially when they have a foal at their side. What are your thoughts?
“I know that there are some who are in favor of changing the rule. It might happen. My fear is that it might result in short term help and in the long run could hurt us immensely. The reason the New York program and those of other states are there is to sustain and help agriculture. Without the agricultural aspect we would not have sires stakes, regardless of the venue. I fear that some of the politicians might get hold of the issue and ask how is shipping semen helping sustain agriculture and employment in the state? You hardly need any green grass and acreage to do that. All you need are a few stallions, a few acres, a person to collect the horses and someone to package the semen and ship it. How is that helping agriculture and employment? I hope it never happens, but it could. We have to be constantly vigilant.”
Let’s talk about Tom Grossman, the guy. Other than your business pursuits what keeps you occupied?
“My son has pretty much taken control of the show horse aspect at Blue Chip. I spend a lot of my time following him compete in shows all around the country. Mostly due to COVID-19 and the restraints it has placed upon ‘ordinary life,’ I’ve become somewhat of a golfing junkie. I’ve always golfed, however recently I have been much more involved. I actually shot a hole in one at Augusta in 1999.
“I’m a huge pizza lover and have checked out most of the best known places in the city. I’ve also invested in a few. Among my favorites are Di Fara, Beebe’s, Paulie Gees and Rubirosa.”
“When I had my Hedge fund, I had my staff run *quants doing studies of pedigrees and breeding. I still occasionally do so.”
*Author’s Note: I had no idea what a quant was. I looked it up and found that it is a means of using computers to determine outcomes.
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