BET ON Me 498 is a roan stallion whose strong bloodline and show performance have increased his value as a stud. (Photograph by Cappy Jackson.)

Cutting is a throwback to the Old West, when cowboys on the range needed to separate—or cut—a cow from its herd for medical care or other purposes. Cowhands chose uniquely skilled horses for the task. The best mounts were attuned to cattle movement, knowing instinctively how to give a 1,500-pound steer enough space while moving it in the right direction.

Today’s cutting competitions mimic this classic ranching work. Contestants get two minutes to isolate a few cows from a herd. After the rider selects a cow to cut and moves into position, he puts down the reins and turns much of the control over to the horse. With only leg signals to guide it, the horse shifts, pivots and dashes to chase the cow away from its herd. A bovine may reach speeds of 30 mph as it tries to escape.

Cutting-Horse investments are as risky and unpredictable as bets on any other living creature—livestock or human.

Prize money, competitions and horse prices have all increased in recent years as cutting grows in popularity. The 60-year-old National Cutting Horse Association (NCHA) now has more than 16,000 members scattered across 50 states and overseas, with most followers concentrated in the Southwest. Smaller show circuits exist on the West Coast and in the Southeast. Three important competitions are held in Fort Worth. The city is just a 30-minute drive from Weatherford, a town packed with horse ranches and trainers that is widely considered the epicenter of the cutting-horse world.

Jean Splicing
Ben Emison of Western Bloodstock, a Weatherford firm that runs NCHA horse auctions, sees a strong upward trend in the cutting industry. “There’s no indication that it’s going to do anything but continue to grow,” he says. In fact, cutting owes much of its popularity to owner participation; it is not a cut-and-run investment. Unlike horse racing, in which animals are handled exclusively by their trainers and jockeys, male and female riders of almost any age can compete in cutting events, stepping out of a tailor-made suit and into a pair of old Levi’s every weekend. “Everybody’s got a little John Wayne in them,” Emison says.

VALUE JUDGMENT The Western equestrian sport known as cutting has grown steadily in popularity over the past decade, spurring new investors to enter the arena. Some devote their resources and time—ample amounts of both are usually required to succeed—to investing and breeding cutting horses, while more adventurous souls enter the competitive ring. Owners, breeders and riders gamble on strong bloodlines, proper training and good luck to grow their capital.

They compete in the same venues as professional cowboys, primarily for the thrill, but also to actively seek returns. Last year, the prize money awarded in NCHA-sanctioned events totaled $35 million, up 24 percent from 10 years ago. The organization’s membership has also grown proportionately in the past decade. Today, at the open professional level of competition, a winner can take home $75,000 to $200,000 for winning a major event.

But most riders are more interested in the joys of the sport. “The horse business and cutting are a great family thing,” says breeder John Harrah, an heir to the Harrah’s gaming fortune; he has 160 cutters on his Nevada ranch and keeps others boarded with trainer Mike Mowery in Texas. “It’s a wonderful outlet for kids. More times than not, they care more about their horse than going out with their friends and getting in trouble.”

A full range of events is offered by the NCHA for competitors, young and old alike, and with various skill levels. Harrah’s 14-year-old son and 12-year-old daughter will start showing during this competition season. “My 4-year-old would love to start tomorrow,” he says, “but I think we’ll wait on him for a while.”

NATIONAL CUTTING Horse Association events awarded $35 million in prizes last year. Major event winners can take home as much as $200,000. (Photo courtesy of National Cutting Horse Association.)

Novices should steer clear of young horses that have just begun their cutting career. Mowery, an NCHA Hall of Fame trainer with $2.1 million in prize earnings, works with Harrah’s 2- to 6-year-olds and “campaigns” them on the competition circuit, trying to amass a substantial show record to increase their value. He advises beginning riders to start with a seasoned gelding, usually 7 years or older. “A good, trained, smart horse can be the best teacher in the world,” Mowery says. “He’s going to be a little more forgiving for the mistakes a beginning rider is going to make.”

Prices for horses vary dramatically; the best ones can command a small fortune. One NCHA Hall of Fame mare, Meradas Little Sue, which earned some $700,000 in competition, sold for a record $875,000 at auction in December 2001. Strong stallions go for $300,000 to $500,000 and more. The average sale price at the spring 2005 cutting-horse auctions was $19,500. Ironically, the most appropriate horse for a new rider, which can be had for as little as $5,000, rarely makes a good investment.

As riders progress in the ring, some of the more passionate competitors also become hooked as investors.

“If you want to get in and hold your money together, then you have to look at top bloodlines and possibly a mare that will hold her value and whose offspring will be worth some money,” Mowery says. “But if you’re looking to learn to ride, I recommend a good, solid gelding, and there’s a chance he will decrease in value a bit.” A valuable horse can actually pick up a beginner’s mistakes and eventually lose his edge.

As riders progress in the ring, some of the more passionate competitors also become hooked as investors. Real estate financier Glade Knight started with one cutting horse for his Virginia ranch. “I just did it for relaxation, to play cowboy on the weekend,” he recalls. But Knight became increasingly fascinated with the sport. With business taking him regularly to Fort Worth, Knight began attending serious cutting events, such as the NCHA Futurity competition, which takes place every December.

Eventually, Knight brought a horse trailer to the Futurity, purchased six cutters and headed back East. Soon even that was not enough, so he purchased a ranch in Weatherford and hired trainer John Mitchell to run the operation. Now they have 150 horses in their Texas breeding and showing program.

“The ranch operation is probably more a place for raising kids than anything else,” points out Knight, who loves to have his children and grandchildren join him there. He believes the environment teaches young people valuable work lessons and raises their self-esteem. “To me, you treat the horse the way you would treat people—you build confidence, you build trust,” he explains. Two of Knight’s sons who work with him in the hotel business are also active cutting competitors.

“I do it because I have a passion for horses and I love it,” Knight says, “but the land and buildings are probably a better investment.” Because his motive is not strictly financial, Knight holds on to less competitive horses if they are gentle with children.

Winning Rides
Those who invest with at least some notion of turning a profit are advised to trot before they gallop. Cutting-horse investments are as risky and unpredictable as bets on any other living creature—livestock or human. Investors must be prepared to devote ample amounts of time toward this avocation. Even expert horsemen must often wait years before being able to gauge a young horse’s potential. And if the beast shows promise, investors must nurture the talented youngster’s bankable skills, a process that takes still longer. Cutting is also a slow-growth business from a tax perspective. Horses must be owned two years before a seller qualifies for the lower capital gains tax rate on any profits, unlike stocks or real estate, which require a one-year holding period, according to Bill Stewart of the accounting firm Stewart, Catlin and Lillard in Weatherford.

Some investors purchase mares exclusively, then show and sell their offspring. Others, usually those more experienced with horses, also keep stallions for stud services. Stud fees of $10,000 and up for a fine stallion are not uncommon. “The percentage of investors who want to get involved with a stallion is quite small,” Emison explains. “Many times it’s because stallions are quite pricey, and it takes a lot of promotional work to keep that program going.”

Cutting-horse breeders can also offer partial ownership of a stallion through a syndicate that guarantees a certain number of breedings per share per year. These breedings can be resold or the shares themselves can be resold later. Horse owners and syndicate investors reap a profit if the horse’s value increases. National Cowgirls Hall of Fame member Lindy Burch, a professional cutting-horse trainer who has earned more than $2.4 million in competition, and her partner, Dan Lufkin, opted to syndicate a stallion called Bet On Me 498. The roan cutting horse, nicknamed Romeo, comes from a line of exceptional mares, with a powerful build and show performance that suggest a great future for his offspring.

Burch made strategic choices to maximize her return on investment. First, she limited the quantity of his breedings to a modest 60 per year. Second, she handpicked investors who already owned exemplary cutting programs, so that when Romeo’s foals arrived, these owners would campaign the animals in shows. The better his offspring performed, the more his value would rise.

Three years ago, the syndicate sold its first 20 shares at $50,000 each, with Burch and Lufkin keeping 20 shares themselves. As the horse’s progeny come of age, the strategy appears to be paying off. One of Romeo’s colts, still too young to be shown, sold for $180,000. Based on this early success, Burch recently released five more syndicate shares, this time at $75,000 each.

For those cutting-horse aficionados who possess an appreciation for the sport that goes beyond the dollars and cents of investments and the appeal of family camaraderie, there is the competition. For some, the lure supersedes their everyday life.

Julie Ann Wrigley of Idaho, chief executive of Wrigley Investments, a director of E.W. Scripps and ex-wife of the late gum magnate William Wrigley Jr., scaled back her obligations in 2002 to compete full-throttle in cutting-horse competitions. She and her horses took to the road and entered more than 20 weekend events. The effort paid off: Wrigley won a world championship and other top awards in her class. Her lifetime winnings now total $99,000. “Cutting is a great way to exercise your competitive spirit,” she says. “I find if I do it with the horses, I tend to do it less with my business and personal life, and it’s very healthy.”

Radio entrepreneur Kingsley agrees. Ten years after his move to Weatherford, he remains more passionate than ever about his chosen sport. “The athleticism of these horses is truly astounding. You drop your hand and the horse goes to work,” he says. “It’s a rush like I’ve never experienced.” 

Wendy Lyons Sunshine is a freelance writer based in Texas.