I've read in a variety of places that those thinking of becoming thoroughbred owners should only do so if its something that you'll enjoy enough to make up for the money it will cost you. The assumption is that, barring extreme good fortune, it's not a "beatable" game. A close look at the economics of owning racehorses is certainly a sobering reminder that the odds are stacked HEAVILY against you. That said, there are clearly massive inefficiencies in the industry, and if I didn't believe that discovering and measuring those inefficiencies had at least the potential to provide enough of an edge to owners to have a profitable expectation, then I wouldn't have started Thoroughmetrics.
That said, it's often useful to write out the exact nature of our 'edge' in any game. In general, if you can't detail specifically where your edge comes from, then you likely don't have an edge. My edges in evaluating breeding, racing, buying, and selling opportunities right now:
1. The results of a single study I did on buying horses at Two Year Old Auctions vs. Yearling Auctions, and in what situations each of them provide better results.
2. My knowledge of correct statistical analysis techniques that allow us to test predictive theories for their ability to forecast the future, rather than just explaining the past.
3. I have shiny, white teeth*
In other words, I have lots of work left to do.
In the absence of a proven edge, sometimes you have to rely on old fashioned common sense. Just don't assume that it will lead to the kind of results you're looking for. My common sense says that most potential owners are overvaluing horses where they can put a check the box next to 'Black Type', and possibly undervaluing horses who might have been equally good, but never earned any black type. I've begun compiling a list (note: there's only one horse on the list so far) of mares who meet the following criteria:
1. Did NOT earn black type.
2. Very lightly raced.
3. Showed potential stakes ability.
4. Career cut short due to problems unlikely to be passed on to offspring.
The first mare on the list is named Comic Relief. Actually, I haven't even verified that point #4 above is true for her, but she meets the other criteria - she won her only start (at a mile and a sixteenth) with a Beyer of 83. She's well bred for whatever that's worth (by Kingmambo). She's being bred to stallions in Florida who stand for $10K-$20K (Bernstein for one), and her offspring haven't yet accomplished anything worth mentioning (the most accomplished was last seen racing in Puerto Rico as far as I can tell). I think she and her offspring are a great value, particularly if I can find out why she was retired, and confirm that it was something relatively unlikely to be passed on to her offspring.
* I'm taking some poetic license here. While shiny, my teeth are not particularly white.