For the last decade, the Saratoga Yearling Sales have been conducted in an almost euphoric atmosphere. People in the thoroughbred business felt the same kind of giddiness that has affected investors in gold, real estate and other booming markets -- a sense that the boom never would end, that everybody would go on making money forever.

The average price of a yearling was increasing by 19 percent a year, and the value of stallions and mares was skyrocketing at a similar rate. "In that environment, you would have to be an idiot to lose money," said John Finney, president of the Fasig-Tipton Company, which conducts the Saratoga sales. "We were hog-fat, and I've loved it."

In the last couple of years the boom has slowed, but the average price of a yearling at the fashionable summer sales has continued to skyrocket. That is the breeding industry's equivalent of the Dow-Jones Average, and those figures helped sustain the euphoria a little while longer. But this summer it finally has become apparent that the party is over.

At the Fasig-Tipton Kentucky Sale, the average yearling price plummeted 13 percent. The Keeneland Yearling Sale attempted to prop up its averages by cutting the number of horses sold, but the average price fell 11 percent. The Saratoga sales, which will begin on Tuesday night and run through Thursday, are next.

"It would be foolish to say that what has happened this summer is an aberration," Finney conceded. "I look for a shakeout to continue for an extended period."

What's happening? Why, when the U.S. economy generally is healthy, is the thoroughbred market starting to erode?

The great boom in the horse business triggered a stampede of players eager to get into the game. Unprecedented numbers of people got into the commercial- breeding business, and unprecedented numbers of horses were put to sale at auction. For the last two or three years, the market's middle and lower ranges have been depressed. Bill Oppenheim, editor of the newsletter Racing Update, says, "For 98 percent of the foal crop, there is either zero demand or far greater supply than demand."

But this is the first time that the very top of the market has shown signs of weakness. Finney has several explanations.

"The most significant thing that has happened," he said, "is the question of tax reform. Our market reacts almost instantly to any changes in the rules. Because of the present uncertainty, people are not sticking their necks out if they don't have to.

"Furthermore, there has been a change in the prevailing mentality of investors which has affected our market. For a long time we felt the concept of money as a store of value was dead. We had a generation which never knew anything but significant inflation. Five years ago, the attitude was that if the dollar was only going to be worth 85 cents the next year, you might as well invest it where you had a chance to hit a home run."

While the super-rich buyers of yearlings -- such as Robert Sangster and the Maktoum brothers -- may not be affected by normal economic considerations, Finney says they have become much more judicious and selective in their purchases. Other insiders theorize, too, that the big players may have started to cooperate with each other a bit: "You take that Northern Dancer colt, Maktoum, and I'll take this one."

All these factors have combined to alter the whole nature of the thoroughbred business. There still is big money to be made in it, but there is no easy money. "We're back to a situation where it is going to take a superior practitioner to succeed," Finney said. The many investors who are belatedly putting their money into stock offerings and limited partnerships to cash in on the thoroughbred "boom" are going to learn an expensive lesson to that effect.

For both buyers and sellers, the yearling market again has become a high-risk speculation, not a sure-fire investment. "Breeders have left the blackjack table and been forced to go to the roulette table," Finney said. "For years you could play this game like blackjack, sitting quietly and playing with a respect for probabilities and come out with a profit. That table is not open any longer in this casino."