Wealth manager Ron Carson was recently at the Kentucky Derby with a client, an owner of Kendall-Jackson Wines. A horse that finishes in a strong position can turn out to be a pretty good investment for the wealthy. Think of a horse purchased for tens of thousands of dollars as a value stock, and the stud fees, that can reach into the millions, as dividends that will pay back the owner for years. Yet no one in the economic class that Carson was hobnobbing with at the Derby would consider a horse as a true investment, even one like Curlin, which earned $60 million throughout his career and was an investment of the Kendall-Jackson family.
"The horses are the play money," Carson, founder and CEO of Carson Wealth Management said. The problem right now, though, is that these "massively wealthy" clients, as Carson described them, are making more money from their playthings than actual investments. And having much more fun during a day at the races than watching the markets move back and forth.
"The general consensus of clients and people at the Derby is that the economy is in a twilight zone. No one really understands it," Carson said. "We are in another world. We don't know what is real."