| T.R | Title | User | Personal
Name | Date | Lines |
|---|
| 229.1 | Caveat emptor ** 10 | VMSDEV::HALLYB | Fish have no concept of fire. | Fri Jun 26 1992 19:59 | 9 |
| 229.2 | Check with GIA | EPS::MEGA | | Mon Jun 29 1992 13:43 | 26 |
| 229.3 | Worse than Van Goghs | TLE::JBISHOP | | Mon Jun 29 1992 15:25 | 17 |
| I wouldn't buy a diamond as an investment unless I already had
a large portfolio of more liquid and more conventional investments,
where "large" means "kids' college expenses and my retirement
are already fully funded".
On the other hand, if you already know a huge amount about gems
and are actively involved in the gem business, you could be well
placed to invest. But then you wouldn't ask here!
For me, gems would come well after oil wells and venture capital
partnerships in the "not until later; maybe never" list.
About eight years ago there was an article in _The_Atlantic_ with
a title like "Have you ever tried to sell a diamond" which I
_strongly_ recommend you look up and read before investing.
-John Bishop
|
| 229.4 | Example of round trip cost... | TALLIS::KOCH | DTN226-6274 ... If you don't look good, DEC doesn't look good. | Mon Jun 29 1992 18:18 | 3 |
| I recently wanted to exchange a pair of E VVS1 .47 carat diamonds for
something else. The wholesaler who sold them to me hemmed and hawed and
basically offered me 3/4 of what I paid for them. Thats a 25% bid/ask spread!!
|
| 229.5 | | TLE::JBISHOP | | Mon Jun 29 1992 18:25 | 5 |
| From what I've read, 75% of your purchase is _very_ good, and
50% or less more usual. No doubt the dealer felt some obligation
to justify the cost you had originally paid to him/her.
-John Bishop
|
| 229.6 | wholesale cost | SCAACT::MANN | | Mon Jun 29 1992 18:47 | 1 |
| any idea how much a 2.03 marquis color D, VS1 sould cost from a wholesaler?
|
| 229.7 | Sure you can profit from gems... | SSBN1::YANKES | | Mon Jun 29 1992 20:20 | 6 |
|
My understanding is that the best way to profit from precious gems
is to become a gem dealer selling to people who think that gems are
great investments. Half-smiley.
-c
|
| 229.8 | gulp - we bought it! | AKOCOA::KDUNN | | Tue Jun 30 1992 13:48 | 11 |
| Well, we bought it but it most likely will become a family keepsake
rather than an investment. It is lovely and it hasn't come off
the finger yet. Good things come to those who wait (I think...).
One thing for sure, I just delayed or cancelled my Miata which I
intended to buy 5 years
down the road. ah well, I'll find a way.
Thanks for the feedback. The dealer was thrilled with the sale - of
course!
Kath
|
| 229.9 | **BE CAREFUL** | JUPITR::LUTZ | | Tue Jun 30 1992 14:13 | 133 |
| Well, since you have already bought the diamond you may want to read
this before any future purchases...
I can sum things up with a phrase: *************BE CAREFUL!!!**********
Diamonds are one of the safest investments to hold on to. By this I mean they
increase from their "actual" value over time at a fairly good rate. Roughly
4-5% during low inflation and 10-15% in high inflation periods ( in the U.S.A.)
which makes them the IDEAL inflation hedge. They appreciate in this manner
because of De Beers of London has a cartel on the diamond trade. They have
set up a Central Selling Organization that has completely controlled the
diamond trade since just before WWII. The diamond value RATE increase
is tied to the U.S. economy because the U.S. is by far the largest
market for **LARGE** diamonds. There were only a few very short periods
in this century when diamonds have gone down in value: (1) 1907 - 1910
I do not remember the reason why... (2) 1927 when large reserves were discovered
in South Africa (3) 1930 - 1932 Because of the U.S. Depression. (4) During
the bren of 1978. ( Wild speculation in Israel over diamond prices. )
Even though diamonds are one of the safest investments to hold, they are
**THE MOST RISKY** investment to buy at or below "actual" value and sell
at or above "actual" value. If you are determined to buy a diamond(s)
PLEASE NOTE the following:
o FIRST AND FOREMOST, buy ONLY G.I.A. ( Gemologists Institute of
America ) certified diamonds. ACCEPT NO OTHER CERTIFICATION.
o SECOND, AND JUST AS IMPORTANT, have the RECENT Rapaport Report
( phone #212-354-0575 I think you need to subscribe to this for
BIG $'s ) to know what the going "wholesale" cost of the diamond
grades are bringing at the New York auction houses.
o Make sure you can identify a flaw on the certification diagram
that can be traced back to the diamond under a microscope to
PROVE the certification correlates with the diamond.
o Try to buy a round diamond if possible, otherwise an oval. DO
NOT BUY ANY OTHER CUT.
o Try to buy D-Flawless,( they bring the best return ) but in
reality that is next to impossible. Do not accept grades below
H or VS1 without a compelling reason.
o DO NOT buy diamonds below 1 ct unless you have a compelling
reason. ( The only flawless in my portfolio is a 0.76 ct. )
o Have a plan on how the heck you are going to sell the diamond
in the future. ( Consignment brings the best return, but of
course is about the most risky. )
o Buy from a dealer YOU CAN TRUST. Find out why he is selling
the diamond.
In my opinion, ( I have to give you mine ) since you are asking questions
through this notes file on this subject, you probably are not too experienced
at diamond investments. I suggest you wait a year and read at least most of
the following books that I have attached to this note to REALLY understand
the investment. I buy my diamonds from someone I trust like a kid brother,
but I still get VERY NERVOUS during the transaction.
BETTER YET, I would suggest that you take the money and invest it in a
portfolio of QUALITY NO-LOAD funds. This way you do not need to become an
expert at your investment. Just let these money mangers with very good track
records deal with making you money. My suggestions are equal amounts in the
following:
Monetta 1-800-666-3882
Gabelli Growth 1-800-422-3554
( The above funds invest in small cap. growth stocks, but have very different
investment styles. )
Financial Industrial Income 1-800-525-8085
( This above fund invests large cap. stocks with a dividend objective.)
Financial Strategic Financial Services 1-800-525-8085
( This is a sector fund investing in the banking and financial services stocks. )
Harbor International 1-800-422-1050
( This fund invests in the stock markets abroad. )
You may want to throw in a Vanguard intermediate bond fund 1-800-662-7447
if you want to a pinch of fixed income investments.
-Marv
THESE ARE ABSOLUTE MUST READING
Diamond Grading ABC: Handbook for Diamond Grading
By: Verena Pagel-Theisen
Publisher: Rubin & Son
ISBN: 3-9800434-1-x
Diamonds and Diamond Grading
By: G. Lenzen
Publisher: Butterworth & Co.
ISBN: 0-408-00547-5
THESE ARE BOOKS THAT SHOULD BE READ
The Diamond Book: A Practical Guide for Successful Investing
By: Michael Freedman
Publisher: Dow Jones-Irwin
ISBN: 0-87094-2234
The Valuation and Investment Merits of Diamonds
By: Sarkis J. Khoury
Publisher: Quorum Books
ISBN: 0-89930-456-7
The Diamond Connection: A Manual for Investors
BY: Antony C. Sutton
Publisher: J.D. Press
ISBN: 0-933252-00-5
THESE ARE NICE TO READ FOR BACK GROUND INFO
The Diamond World
By: David E. Koskoff
Publisher: Harper & Row
ISBN: 0-06-038005-5
The History of Diamond Production and the Diamond Trade
By: Dr. Godehard Lenzen
Publisher: William Clowes & Sons
[SBN] 214:65084-7
|
| 229.10 | | NOTIME::SACKS | Gerald Sacks ZKO2-3/N30 DTN:381-2085 | Tue Jun 30 1992 14:22 | 1 |
| What happens if the cartel falls apart? How likely is that?
|
| 229.11 | | LJOHUB::HEERMANCE | Belly Aching on an Empty Stomach | Tue Jun 30 1992 14:35 | 13 |
| Re: The De Beers cartel
I've heard mumblings for years that De Beers is having a problem
with excess inventory and that eventually they'll have to lower
the price. I doubt it will happen.
I look at them like Pespi Co or Coca Cola. They have a product
which they price well above its material value. Then tie its
purchase to emotional decision making through the use of advertising.
It's a winning strategy.
Martin H.
|
| 229.12 | | VMSDEV::HALLYB | Fish have no concept of fire. | Tue Jun 30 1992 16:11 | 11 |
| A big danger to De Beers and diamond prices is the possible actions a
new South African collectivist government might take. Nationalize the
DeBeers holdings and mine diamonds like crazy. It's a losing strategy,
but is the typical sort of thing a new government would do.
Such an outcome is only a possibility, not a certainly.
John
p.s., I think the Panic of 1907 may have had some impact on prices in
the 1907-1910 timeframe.
|
| 229.13 | DIAMOND PRICES... | JUPITR::LUTZ | | Wed Jul 01 1992 12:52 | 111 |
| I have attached two charts on diamond prices. The first is the dealer prices
on cut/polished,1ct, D-flawless diamonds. The second is the percentage
increase De Beers charged for the rough diamonds per ct with the base
year = 1948. Both charts end at the year 1980...
===============================================================================
DEALER PRICES FOR 1-CARAT, D-FLAWLESS DIAMONDS 1976 - 1980 *
( DEALER PRICES ARE WHAT IS QUOTED IN THE RAPAPORT DIAMOND REPORT AND
SOMETIMES REFERRED TO AS "WHOLESALE PRICE" )
* SOURCE: JC-K DIAMOND ORICE INDEX
3/76 $6200
4/76 $6200
5/76 $6500
6/76 $6500
7/76 $6500
8/76 $6500
9/76 $6500
10/76 $6800
11/76 $6825
12/76 $7045
1/77 $7865
2/77 $7350
3/77 $7200
4/77 $8322
5/77 $8200
6/77 $8200
7/77 $7875
8/77 $8138
9/77 $7925
10/77 $8000
11/77 $8000
12/77 $10000
1/78 $12000
2/78 $13500
3/78 $15000
4/78 $17000
5/78 $18500
6/78 $16500
7/78 $16500
8/78 $16500
9/78 $22000
10/78 $22000
11/78 $20000
12/78 $22500
1/79 $22500
2/79 $21000
3/79 $21000
4/79 $21000
5/79 $21000
6/79 $21000
7/79 $21000
8/79 $23500
9/79 $27500
10/79 $33350
11/79 $39000
12/79 $37000
1/80 $41875
2/80 $50000
3/80 $63000
=============================================================
DE BEERS ROUGH DIAMOND PRICES 1948 - 1980 *
* SOURCES: (1) INTERNATIONAL DIAMOND ANNUAL 1971
(2) PUBLIC ANNOUNCEMENTS, DIAMOND TRADING COMPANY
( DE BEERS ) 1971 - 1980
MONTH/YEAR %INCREASE COMPOUND
%INCREASE
1/48 BASE YEAR 100.00
9/49 25.00% 125.00
3/51 15.00% 143.75
9/52 2.30% 147.06
1/54 2.00% 150.00
1/55 2.50% 153.75
1/57 5.70% 162.51
5/60 2.50% 166.57
3/63 5.00% 174.90
2/64 10.00% 192.39
8/66 7.50% 206.82
11/67 16.60% 241.30
8/68 2.50% 247.33
7/69 4.00% 257.23
11/71 5.00% 270.09
1/72 5.40% 284.67
8/72 6.00% 301.75
2/73 11.00% 334.94
3/73 7.00% 358.38
5/73 10.00% 394.23
8/73 10.20% 434.44
12/74 1.50% 440.95
1/76 3.00% 454.17
8/76 5.75% 480.29
3/77 15.00% 552.33
12/77 17.00% 646.23
8/78 30.00% 840.09
9/79 13.00% 949.30
2/80 12.00% 1,063.22
|