Headlines in the Daily Racing Form recently announced the latest evidence of a boom in the thoroughbred market. The Keeneland Yearling Sales, the bellwether of the industry, produced near record prices. There was such intense demand for well-bred, well-conformed prospects that million-dollar babies were commonplace.

However, a reader perusing the guts of the newspaper might have gained a different impression of the sport's health. At Del Mar, a 2-year-old maiden race with a whopping $46,000 purse drew a field of six. Laurel Park ran a nine-race card with a total of 56 horses entered. Calder Race Course couldn't muster more than eight horses for a non-maiden race.

Most tracks can't offer full fields because they don't have enough horses -- and not enough horse owners. The sport's economics seem slightly schizophrenic.

Traditionally, what happens at Keeneland is thought to represent the state of the industry; the average price of a yearling at the summer sale is the industry's equivalent of the Dow Jones Industrial Average. By this measurement, the industry has come back from the depths.

In the thoroughbred business, 1984 is remembered as 1929 is on Wall Street -- the year when prices hit their peak, only to be followed by a devastating crash.

The average Keeneland yearling in 1984 sold for $601,000. This frenzy of buying was followed by a bust that bankrupted some of the world's most famous horse farms. Ten years later, the average price at Keeneland had dropped to $233,000.

But this summer the cost of the average Keeneland yearling had soared to $582,000 and demand has been strong at other auctions. Prices at the Fasig-Tipton Kentucky Sale shot up 35 percent over last year and business is expected to be robust at the upcoming Saratoga sale.

For many breeders, happy days are here again, although some -- who remember the excesses of the '80s -- worry that this could be the start of another boom-and-bust cycle.

Actually, the current upsurge in prices isn't like the '80s. What happened in the last decade was a classic speculative mania. Buyers paid ridiculous prices for a commodity in the expectation that they could sell to somebody else for even more ridiculous prices. They went to banks and borrowed heavily so they could stay in the game. When prices retreated to sane levels, many breeders found themselves so over-committed that they could never recoup. But the boom of 1999 is based on the same sort of pyramid scheme.

"This upsurge feels a lot different from the '80s," pedigree consultant Bill Oppenheim said. "It's happening because there's so much money in the general economy. The Dow is almost three times what it was in 1993, so tremendous new wealth has been created, and some of it is seeping into the horse business."

It takes only a small number of rich horse lovers to power the upper end of the business -- people such as Satish Sanan, the Indian-born founder of a company that supplies software services for firms around the world. He spent more than $10 million at Keeneland -- more than one-eighth of the gross of the entire sale.

Buyers such as Sanan know they are bucking formidable odds when they buy an expensive horse, but they can afford to take the gamble, and they know they have a chance to make an occasional big score.

"At the top level, you have the economic prospect of the home run," said Ray Paulick, editor-in-chief of Blood-Horse magazine. "Stallion prospects are hot again, and that's the pot of gold."

With the yearling market surges, the value of stallions increases. If a superbly bred colt from the Keeneland sale goes on to become a champion, he might be worth $20 million when he goes to stud. But if a buyer has to spend $3 million for the superbly bred colt -- as Ireland's Coolmore Stud did for the top yearling at Keeneland -- he's getting pretty lousy odds that a 1-year-old animal is going to develop into a great champion. And that's what defines the horse ownership: lousy odds.

Paulick cites this statistic: The rate of return on an investment in racehorses in America is 42 cents on the dollar. (In other parts of the world, particularly Asia, the return is considerably better; in South Korea, a buyer is apt to make money.) Even when purse money looks good in the United States -- as it does when Del Mar puts up $46,000 for a maiden race -- it doesn't begin to offset the high costs of buying and maintaining a thoroughbred. That's why it helps to own an international software company to play this game.

The sport desperately needs to increase purse money dramatically -- perhaps through in-home betting, perhaps through the introduction of slot machines to major tracks -- so that owners can be properly compensated. Although the results at Keeneland may suggest that the thoroughbred industry is flourishing again, the business isn't economically sound when buying a $100,000 racehorse is a worse investment than buying $100,000 worth of lottery tickets.