colored stone appraisals

[smitcompton]

Hi,

When I first started collecting , I would run to a GIA trained gemologist to check out my purchase and appraise the item.
Initially, I was quite surprised at how high these appraisals were. A good number of them were bought from JTV, and they always told you to get an appraisal to verify what their OAP told you. I will state that the appraisals that were done were stated as being for insurance purposes. JTV continues this practice to this day, except on fewer items.

As my collection grew I began to think I was becoming rich on my jewels alone. If I took a ring in to be sized or a stone to be set to Helzberg jewelers they always inquired as to the value of the gems. Without fail, I would be told, "If that ring were in our store we would sell it for $2.000.00(a 1 ct diamond band) which I paid $300.00 for.

I have read from appraisers on the diamond board that it always depends on the market you are in. Now most of us understand a Tiffiny brand ring will appraise out for more . But do we understand why the internet appraisal would be less than a brick and mortar store? Do we understand why colored stones, even allowing for many variations do not have a fairly consistant value. Do we understand why appraisals are so high? There was a time on this board that hugh dollar amounts were discussed for value of spessertites, $1,800.00 per carat for just an orangy spess, (fanta seems to be the new best color). The same for tsavorites.

My GIA guy appraised a 14kt 90 pt round tsav at @1700.00. I paid About $350.00 for ring and stone(a gift for a niece). I think appraisals are too high. Are you gals finding the same thing?

I have read what appraisers think. I am looking for the ordinary(not that you guys are Ordinary) person to answer as you buy stones from on line people. You see replacement cost is supposedly less for you guys.

Just a discussion as we discussed lab reports.

Thanks,

 

[Barrett]

I am not keen on many apprasials..if i was to get a stone appraised it would be with Richard Sherwood..he is in tune with todays markets and prices across the board...I don''t know enough about appraising stones but i have this picture in my head of many appraisers using some kind of master sheet that has the numbers already written out they just copy down....without taking the time to factor in all the variables...I know thats probably not right but i wonder how some appraisels are what they are...

 

[PrecisionGem]

There is a difference between an appraisal, and what you could actually sell the piece for. If your jeweler said he would sell you $300 piece for $2000, ask him how much he would buy it from you for. You would think he should be happy to pay $1000 for it and double his money, but I think the reality is much different.

If all these stones and rings being sold on JTV are really worth the "appraised" value, then why are they not selling them for that? A brand new BMW Z4 is appraised for $59,000 and if you go to buy one, you will pay $59,000. It''s a shame that the jewelry market is all over the place with it''s pricing.

The bottom line is that gems and jewelry for the most part are not good investments. You are buying somewhere between wholesale and retail, and selling usually as a consumer below wholesale.

 

[chrono]

I find a majority of appraisals inflated. It is difficult to get a truly independent appraisal but not impossible. A truly well qualified and independent appraiser like Richard Sherwood will also supply current valuation based on online and B&M pricing. He also breaks down everything in detail with possible origin. I’ve seen too many inflated appraisals to keep count of those and I don’t understand why it is so prevalent; it must be to make the customer feel good about their purchase? I’d bet that you can never sell that ring and tsavorite for $1700, am I correct?

 

[Jim Rentfrow]

Date: 2/18/2010 2:14:51 PM
Author: Chrono
I find a majority of appraisals inflated. It is difficult to get a truly independent appraisal but not impossible. A truly well qualified and independent appraiser like Richard Sherwood will also supply current valuation based on online and B&M pricing. He also breaks down everything in detail with possible origin. I’ve seen too many inflated appraisals to keep count of those and I don’t understand why it is so prevalent; it must be to make the customer feel good about their purchase? I’d bet that you can never sell that ring and tsavorite for $1700, am I correct?

I think you hit it right on the head there. And you can be sure that an insurance company is not going to pay that amount to replace the ring if it is ever lost or stolen. I know when my wedding ring went missing I was offered the replacement price of my ring or have it replaced. It was no where near the appraisal price.

 

[AustenNut]

My limited understanding was that some of the appraisals (Labtrade comes to mind) were done for insurance purposes. This amount would be used as the retail replacement value should anything occur to the ring (and you''re insured). But if that''s not the case, how do insurance companies determine the replacement value? And is an appraised value supposed to be what it''s worth retail, or how much someone would (likely) buy the stone for?

 

[Jim Rentfrow]

The way the insurance companies deternined the replacement value for my ring is they had three companies that they dealt with in town. These three jewelers were given the appraisal that had the ring specs on it. They then checked the price for the ring through their suppliers and the lowest priced store won the business or the company cut a check for that amount to the insured

 

[mastercutgems]

I have to agree with Gene; as prices for colored gems are all over the place... I know so many on this forum have seen one vendor with a 2 carat medium blue basic heated natural sapphire , eye clean for 500 a carat and then another is 350 a carat and then you go to certain bidding sites and see it for 50 dollars a carat. So it does make it kind of difficult...
It is like when you have an estate appraisal and a insurance appraisal; the estate appraisal is what you can sell it for on the street at that moment and the insurance is the one that makes you feel really good about your full retail purchase...

I know many of us that cut and many that do not cut but shop for their clients really have to work very hard to get prices that we feel are competitive for good , natural, quality material. It is like the old adage comparing apples with apples; well in gemstones the apples have many varieties even in the own family.
Just like tsavorites; how many shades? clarity, cut, weight, etc. And that is just one sub-group of one family... It gets kind of crazy.


Gems are liquid-able; not like gold or silver are; but I think it still stands true gemstones are the only items you can hold over a million dollars worth in the palm of your hand; can''t do that with gold, platinum, etc... Plus if the dollar becomes just paper; gold, silver, precious metals and gemstones have always held some sort of intrinsic value... Always will... Everyone love shiny things

Just my humble opinion but getting back to appraisals; you really need to be looking at wholesale appraisals to get a more true value of the gem you have.

Most respectfully;

 

[Jim Rentfrow]

Date: 2/19/2010 9:13:45 AM
Author: mastercutgems
I have to agree with Gene; as prices for colored gems are all over the place... I know so many on this forum have seen one vendor with a 2 carat medium blue basic heated natural sapphire , eye clean for 500 a carat and then another is 350 a carat and then you go to certain bidding sites and see it for 50 dollars a carat. So it does make it kind of difficult...
It is like when you have an estate appraisal and a insurance appraisal; the estate appraisal is what you can sell it for on the street at that moment and the insurance is the one that makes you feel really good about your full retail purchase...

I know many of us that cut and many that do not cut but shop for their clients really have to work very hard to get prices that we feel are competitive for good , natural, quality material. It is like the old adage comparing apples with apples; well in gemstones the apples have many varieties even in the own family.
Just like tsavorites; how many shades? clarity, cut, weight, etc. And that is just one sub-group of one family... It gets kind of crazy.


Gems are liquid-able; not like gold or silver are; but I think it still stands true gemstones are the only items you can hold over a million dollars worth in the palm of your hand; can''t do that with gold, platinum, etc... Plus if the dollar becomes just paper; gold, silver, precious metals and gemstones have always held some sort of intrinsic value... Always will... Everyone love shiny things

Just my humble opinion but getting back to appraisals; you really need to be looking at wholesale appraisals to get a more true value of the gem you have.

Most respectfully;

I used to be in financial services and I have a really good friend who owns a jewelry store in Fargo, ND. He is very successful and I had tried to talk to him on retirement funds etc. His answer was exactly that, gems and gold are always in demand, they rarely go down in price and he could take everything in his store pack it into a large suitcase and be anywhere in the world and be able to make money.

 

[PrecisionGem]

I''d rather have $100,000 in cash, than $150,000 retail worth of gemstones.

You still need to sell the stones, and we all no that takes some time. How many stones do you have in inventory right now Jim, that you would like to sell. If you needed the money by next week, how much would you need to mark them down to sell them all?

 

[Stone Hunter]

Date: 2/19/2010 10:15:01 AM
Author: Jim Rentfrow

I used to be in financial services and I have a really good friend who owns a jewelry store in Fargo, ND. He is very successful and I had tried to talk to him on retirement funds etc. His answer was exactly that, gems and gold are always in demand, they rarely go down in price and he could take everything in his store pack it into a large suitcase and be anywhere in the world and be able to make money.

Well if this would work for him why wouldn''t it work for a regular Joe/Sally? Is it because he bought the stuff so so so much cheaper than the amount he could sell it for. And could he really sell it for that much if he wasn''t an authorized retailer in whatever country he ended up in?

 

[smitcompton]

Hi All,

First Chrono-- No I don''t think I could sell any of my jewels for their appraisals. These were -are - insurance appraisals. I went to 4 different appraisers, including 2 stones appraised by from Richard Sherwood. He explained that he would use the department store market as the basis for his appraisals, which means its not high end or low end.


Gene, I do understand I cannot sell them for the appraisal figures. But, I am concerned that all my appraisals really are too high. I certainly didn''t realize this when I was new. Should the New York market ''be more for a sapphire than the Midwest? +I can''t see it. Yes there are variables but when I went to the Vault ,aka my safe deposit box, I noticed an inclusion that I hadn''t noticed before, and wondered why the appraiser didn''t put that down in the appraisal? These are just questions that I think our colored stone readers may be interested in.

But, how nice of you all to move the topic into another question I have. Most everyone says your jewels should not be bought for investment and I somewhat agree. But, as I look at the history of Nazis invasions which caused numbers of people to flee with the only valuables that they could carry quickly, their jewels, and the escape of Royalty as Monarchies (SP)fell, with their jewels to help them escape. Their jewels saved their lives. I can''t see it as a bad thing to know that they could save your life oneday. I will keep them in my safe deposit box with some cash --just in case.

Middle class families during the second world war did use their gems to survive. So there Gene. Maybe you wont get rich(I''d rather the $100.000 in cash now), but there were times cash was worth nothing.

Thanks for commenting. I admit some of the gems these ladies have collected would help them in the future, Just my musings.

Thanks,

 

[Gailey]

Date: 2/18/2010 2:14:51 PM
Author: Chrono
I find a majority of appraisals inflated. It is difficult to get a truly independent appraisal but not impossible. A truly well qualified and independent appraiser like Richard Sherwood will also supply current valuation based on online and B&M pricing. He also breaks down everything in detail with possible origin. I’ve seen too many inflated appraisals to keep count of those and I don’t understand why it is so prevalent; it must be to make the customer feel good about their purchase? I’d bet that you can never sell that ring and tsavorite for $1700, am I correct?

Where is Richard? He seems strangely absent these days????

 

[LD]

In the UK an appraisal for insurance purposes is comprised of the following:-

1. The goldweight and carat weight based on the current market rate = £X
2. The size/clarity/quality of the gem based on known £ per carat at that time (for more difficult stones to source a premium may be added) = £Y
3. The cost of a jeweller to source and make the item from scratch - £Z

£X + £Y + £Z = appraisal value.

So it''s definitely not a value indicative of a re-sale value but it''s the likely cost of being able to find/have made the same item if lost in the future.

Of course, it''s normally higher than you paid because the calculation used doesn''t take account of the fact that you''ve bought for a wholesaler who''s prices reflect their buying ability. The only problem with this is that if you insure for the appraisal value, you''re also paying higher premiums.

Hope that helps.

 

[Jim Rentfrow]

Date: 2/19/2010 1:11:39 PM
Author: Stone Hunter

Date: 2/19/2010 10:15:01 AM
Author: Jim Rentfrow

I used to be in financial services and I have a really good friend who owns a jewelry store in Fargo, ND. He is very successful and I had tried to talk to him on retirement funds etc. His answer was exactly that, gems and gold are always in demand, they rarely go down in price and he could take everything in his store pack it into a large suitcase and be anywhere in the world and be able to make money.

Well if this would work for him why wouldn''t it work for a regular Joe/Sally? Is it because he bought the stuff so so so much cheaper than the amount he could sell it for. And could he really sell it for that much if he wasn''t an authorized retailer in whatever country he ended up in?

He has 35 years of experiance in the trade. He has his own gemstone cutter, goldsmith supply chain and distribution chain. He can buy at rough gemstone prices and sell at retail. A lot of people cant do this.

 

[chrono]

Date: 2/19/2010 3:57:20 PM
Author: smitcompton
But, how nice of you all to move the topic into another question I have. Most everyone says your jewels should not be bought for investment and I somewhat agree. But, as I look at the history of Nazis invasions which caused numbers of people to flee with the only valuables that they could carry quickly, their jewels, and the escape of Royalty as Monarchies (SP)fell, with their jewels to help them escape. Their jewels saved their lives. I can''t see it as a bad thing to know that they could save your life oneday. I will keep them in my safe deposit box with some cash --just in case.

Middle class families during the second world war did use their gems to survive. So there Gene. Maybe you wont get rich(I''d rather the $100.000 in cash now), but there were times cash was worth nothing.

Thanks for commenting. I admit some of the gems these ladies have collected would help them in the future, Just my musings.

Thanks,

I do not consider that as investment during times of war; at that point it is survival. Gold and other valuable metals are better in that situation as it can be melted down and reshaped as needed by the buyer. They also tend to have a more agreed upon valuation during those times. Gemstones are more iffy; people usually will not buy the lower end stones; only large pieces of extraordinary colour and rarity will actually be purchased yet the purchase price of those pieces will only be a fraction of that it is truly worth because the buyer knows that the seller is desperate. In that situation, is it really an investment because the seller is selling at a huge loss? To me, it isn''t an investment, but a backup survival plan.

 

[morecarats]

I''ve seen several people on this forum who have argued that gemstones make good investments because they have intrinsic value, whereas paper currency can, in extraordinary circumstances, become worthless.

It''s hard to argue with the latter point, since it has certainly happened in the past. But imagine you''re holding gemstones during one of those periods when paper money becomes worthless. You want to sell your gems. But what do you sell them for? Food? Gasoline? Guns? Just curious ...

 

[Arkteia]

Date: 2/19/2010 3:57:20 PM
Author: smitcompton
Hi All,

First Chrono-- No I don''t think I could sell any of my jewels for their appraisals. These were -are - insurance appraisals. I went to 4 different appraisers, including 2 stones appraised by from Richard Sherwood. He explained that he would use the department store market as the basis for his appraisals, which means its not high end or low end.


Gene, I do understand I cannot sell them for the appraisal figures. But, I am concerned that all my appraisals really are too high. I certainly didn''t realize this when I was new. Should the New York market ''be more for a sapphire than the Midwest? +I can''t see it. Yes there are variables but when I went to the Vault ,aka my safe deposit box, I noticed an inclusion that I hadn''t noticed before, and wondered why the appraiser didn''t put that down in the appraisal? These are just questions that I think our colored stone readers may be interested in.

But, how nice of you all to move the topic into another question I have. Most everyone says your jewels should not be bought for investment and I somewhat agree. But, as I look at the history of Nazis invasions which caused numbers of people to flee with the only valuables that they could carry quickly, their jewels, and the escape of Royalty as Monarchies (SP)fell, with their jewels to help them escape. Their jewels saved their lives. I can''t see it as a bad thing to know that they could save your life oneday. I will keep them in my safe deposit box with some cash --just in case.

Middle class families during the second world war did use their gems to survive. So there Gene. Maybe you wont get rich(I''d rather the $100.000 in cash now), but there were times cash was worth nothing.

Thanks for commenting. I admit some of the gems these ladies have collected would help them in the future, Just my musings.

Thanks,

You know the Nazis during WWII may not be such a good example. The goods that they had amassed mostly came from loitering - and of course you can always sell a Rembrandt or a Rubens at a very high price. The gems they had were of such quality. Same for people who escaped the Nazi regime - I suspect they did not sell their stones but just gave them to the Nazi to get necessary documents. Really, they did not escape with their jewels, they paid the price of their jewels to escape. It is probably LIFE investment not MONEY investment. An appraisal would hardly help in such cases.

I once knew a Russian guy who used to be a governor of Magdeburg during WWII (or so he said). You should have seen his apartment. A museum! All, of course, obtained the same way as the Nazis used to do. Some of Russian marshals were prosecuted after WWII but not because of loitering - because of selling their stones and art too fast - it drew attention to the fact that the Soviet Union was behaving the same wasy as the Nazis used to do. This guy I knes was quietly sitting on his goods - of course it was an investment. I do not know what happened to these things later - I know he died, his flat was sold and his wife married another guy. But someone might have it now.

This is a true investment. I do not believe anyone on this forum has stones of such a quality (sorry, girls) - while they are heirlooms they can hardly be considered investment of such a degree (I may not know much). Currency depreciates with time and the fact that you can sell the goods at a higher price than you bought it 20 years ago reflects, among other things, depreciation of the dollar. Of course one may be lucky enough to have foreseen the value of Paraibas but honestly, these are exceptions. Their price will get up no doubt but not to the level that is considered true investment.

I suspect appraisal prices are inflated for insurance purposes and possibly for tax-deduction purposes. But I have read a book on tax deduction - really, people have to be careful when they deduct and think of the real cost of their goods.

I think the value of gold has grown more than the price of the stones per se and it is partially contributing to high appraisals.

It also seems that the more expensive the stone is, the more true to life the appraisal you get. I think it is somehow linked to the replacement cost.

 

[Harriet]

In the event of war etc., we're talking about a different economy, i.e., the barter system. When we're discussing 'investment stones,' isn't a regular economy assumed?

Crasru, what would you say if I told you that a number of my gems have already appreciated in value due to scarcity. What's more, I can realise that gain? I wouldn't have made my statement, but for your generalisation that none of us have what you consider to be investment stones. LovingDiamonds also has counter-examples to your claim. As for tax deductions, I don't see what they have to do with appraisals. My background is in tax law and I can comfortably say that 'investing' in stones is not a tax-advantaged move.

 

[smitcompton]

Hi All,

Thanks for responding. I agree that the appraisal represents replacement cost, but the replacement costs, at least on my costs, would probably be much less than the appraisal. I''m really questioning the appraisals. I consider the relacement cost today vs 5 yrs ago, when I did buy these to be somewhat like an investment. I did not buy it with that thought in mind.

If I were to save my life or my families life with jewels, I know I couldn''t really call that an investment, but if it happened to me, I would use that phrase.

I do agree with Harriet in saying that some collections from the women on this board look like investment pieces to me. I think Harriets will be . She chooses her stones carefully, with the right size as well. I have enjoyed watching her purchases.
I have just become aware of LD''s pieces and shall continue to enjoy seeing those.

Years ago I looked through some examples of others jewelry. I know I thought someone named Widgets items were beautiful, and Kaleighs as well. They look as good as jewels that are auctioned off.

All in all, there are many different levels of buying on this board. L.D. the pear topaz was lovely that you brought up. Looked pariaba to me.

I think its an interesting topic. Thanks for the serious responses.

Thanks,
Annette

 

[Arkteia]

Date: 2/20/2010 2:51:15 PM
Author: Harriet
In the event of war etc., we''re talking about a different economy, i.e., the barter system. When we''re discussing ''investment stones,'' isn''t a regular economy assumed?

Crasru, what would you say if I told you that a number of my gems have already appreciated in value due to scarcity. What''s more, I can realise that gain? I wouldn''t have made my statement, but for your generalisation that none of us have what you consider to be investment stones. LovingDiamonds also has counter-examples to your claim. As for tax deductions, I don''t see what they have to do with appraisals. My background is in tax law and I can comfortably say that ''investing'' in stones is not a tax-advantaged move.

I was merely responding to the statement that in war times and post-war times stones are the way to survive. LD has stated numerous times that stones are not investment. I do not mean that yours, or LD''s, or TL''s, or Chrono''s stones are not excellent examples of how a thoughtful, well-known collector can find best quality for the money and then watch the price of the stones skyrocket! God, look at LD''s paraibas! Also Richard Wise mentioned the price of his Paraibas that he bought in the 90-es. But he also stated that stones could not be considered investment. It will take me some time but I have to find his posting.
I was responding to a totally different statement - that stones were an investment that helped people during and after the war. While some of them definitely could, they had to be of historic value to be realized at a decent sum after the war. I was discussing LIFE investments (i.e. investments that could buy your life or help you live problem-free in Argentina for many post-war years). There are very few that really could foot the bill for decades.

As for tax purposes...I read someone''s question "where can I sell my stones?". Basically most answers stated that it was difficult to sell stones at a decent price. I can not keep stones that I don''t wear. Even if they are beautiful. So I donated them and can deduct the cost. A good appraisal should help; but I read about tax writeoffs of donated stones or jewelry items. Apparently, some people had been prosecuted for writing off too much. This is all what I wanted to say.

 

[Arkteia]

Date: 2/20/2010 4:37:56 PM
Author: crasru

Date: 2/20/2010 2:51:15 PM
Author: Harriet
In the event of war etc., we''re talking about a different economy, i.e., the barter system. When we''re discussing ''investment stones,'' isn''t a regular economy assumed?

Crasru, what would you say if I told you that a number of my gems have already appreciated in value due to scarcity. What''s more, I can realise that gain? I wouldn''t have made my statement, but for your generalisation that none of us have what you consider to be investment stones. LovingDiamonds also has counter-examples to your claim. As for tax deductions, I don''t see what they have to do with appraisals. My background is in tax law and I can comfortably say that ''investing'' in stones is not a tax-advantaged move.

I was merely responding to the statement that in war times and post-war times stones are the way to survive. LD has stated numerous times that stones are not investment. I do not mean that yours, or LD''s, or TL''s, or Chrono''s stones are not excellent examples of how a thoughtful, well-known collector can find best quality for the money and then watch the price of the stones skyrocket! God, look at LD''s paraibas! Also Richard Wise mentioned the price of his Paraibas that he bought in the 90-es. But he also stated that stones could not be considered investment. It will take me some time but I have to find his posting.
I was responding to a totally different statement - that stones were an investment that helped people during and after the war. While some of them definitely could, they had to be of historic value to be realized at a decent sum after the war. I was discussing LIFE investments (i.e. investments that could buy your life or help you live problem-free in Argentina for many post-war years). There are very few that really could foot the bill for decades.

As for tax purposes...I read someone''s question ''where can I sell my stones?''. Basically most answers stated that it was difficult to sell stones at a decent price. I can not keep stones that I don''t wear. Even if they are beautiful. So I donated them and can deduct the cost. A good appraisal should help; but I read about tax writeoffs of donated stones or jewelry items. Apparently, some people had been prosecuted for writing off too much. This is all what I wanted to say.

BTW, I hope Harriett that you or anyone else who has been directly/indirectly mentioned in my posting has not been offended. I was just repeating your own statements. I myself would do anything for one of stones like LD or Chrono has - I suspect I did not express myself well. All I know is at the times of calamity very few things can really help.
What did save people in post-war Germany was being strong, and beautiful and a woman. If anyone has ever watched a movie "Marriage of Maria Braun" by Fassbinder you may understand what I mean.

 

[LD]

I'm sure nobody has been offended! I certainly wasn't!

Maybe you didn't mean to say "I do not believe anyone on this forum has stones of such a quality (sorry, girls) - while they are heirlooms they can hardly be considered investment of such a degree"! I think Harriet was pointing out that some people on this forum DO have gems that could be classed as such. Don't forget what you see on this forum is what people want to be seen, not necessarily their whole collection. For the record, I actually don't consider my Paraibas to be investment pieces. Most (maybe nearly all) I could sell for far more than I paid because I made some good buys at a time when the prices were far lower. However that to me is still not an investment.

You're absolutely right when I say "don't buy gemstones for investments" but if you read my posts you'll also see I say there are SOME gemstones that you might consider to be investment pieces BUT they are few and far between AND you have to buy fine examples AND they have to be highly sought after ............ so you'll be buying for big bucks in the first place. You also have to REALLY know gemstones and be in the right place at the right time and be able to identify an opportunity before others!

There are absolutely no guarantees in the gemstone world and it's a bit like playing the stock market. One minute you'll be sitting on a gem fortune, the next it may be worth less than you paid. There was an excellent example on the other thread about Tanzanite where Mr Zeolite cited 1980 prices of over $1400 per carat. It's now around $450-500. Imagine how those people who bought then must feel now! They certainly won't be yelling to anybody that their Tanzanite was an investment!

 

[Arkteia]

Date: 2/20/2010 4:58:48 PM
Author: LovingDiamonds
I''m sure nobody has been offended! I certainly wasn''t!

Maybe you didn''t mean to say ''I do not believe anyone on this forum has stones of such a quality (sorry, girls) - while they are heirlooms they can hardly be considered investment of such a degree''! I think Harriet was pointing out that some people on this forum DO have gems that could be classed as such. Don''t forget what you see on this forum is what people want to be seen, not necessarily their whole collection. For the record, I actually don''t consider my Paraibas to be investment pieces. Most (maybe nearly all) I could sell for far more than I paid because I made some good buys at a time when the prices were far lower. However that to me is still not an investment.

You''re absolutely right when I say ''don''t buy gemstones for investments'' but if you read my posts you''ll also see I say there are SOME gemstones that you might consider to be investment pieces BUT they are few and far between AND you have to buy fine examples AND they have to be highly sought after ............ so you''ll be buying for big bucks in the first place. You also have to REALLY know gemstones and be in the right place at the right time and be able to identify an opportunity before others!

There are absolutely no guarantees in the gemstone world and it''s a bit like playing the stock market. One minute you''ll be sitting on a gem fortune, the next it may be worth less than you paid. There was an excellent example on the other thread about Tanzanite where Mr Zeolite cited 1980 prices of over $1400 per carat. It''s now around $450-500. Imagine how those people who bought then must feel now! They certainly won''t be yelling to anybody that their Tanzanite was an investment!

Absolutely, LD, and I was always surprized that people showed even what they had! Because all of it is so expensive. And I was probably very naive in misiinterpreting some of statements (someone also mentioned something about people on this forum to be "average" collectors; I do not know who it was). Actually, after I posted my answer I immediately thought that I should not generalize because I never saw any of your real collections...but when something is posted, it is too late.
Now I remember your statement about SOME stones being considered investment pieces but being few and far between. So I think my conclusion was very naive but I doubt that everyone on this forum has stones that can be considered museum quality or "investment". I would have never even voiced my opinion because I just bought equipment to evaluate stones and know that even with equipment and classes I shall never be a good collector because I started too late and because it was hard to even find a good appraiser, and you''d think that everyone who is GIA-certified should be excellent!
So...sorry. I hope people understand me in the right way. I know that I have made too many mistakes in my purchases because I started with "expensive" and went down. Who can blame me for wanting an alexandrite? But I know I shall not be able to sell it at a fraction of a price I bought it for.
I still believe that my statement about investment in case of war was true but I now understand I was totally wrong in using all of you - fine collectors - as an example. You are totally opposite of what I meant to say. Sorry, stupid of me.

 

[LD]

Crasru - there is NO need to apologise at all and you certainly don''t need to put yourself down either.

You know, we all have to start somewhere. Some start at the top, some start with fish gravel - that''s the way it is!

You''ve come from a Country and seen and done things that most of us couldn''t even imagine so I understand your statements about war.

My only advice to you is that even though you started collecting gemstones/jewellery later than you would have liked, it doesn''t mean anything. It actually means you probably have the funds to avoid the fish gravel! However, buy slowly. Do tons of research. Post up tons of questions and really educate yourself (as I know you have been doing). That way, you won''t buy expensive fish gravel! Hopefully in 5-10 years time you''ll have a wonderful collection of statement pieces.

 

[m76steve]

iv had many stones appraised by different gem appraisers-all certified as such & on good but professional terms with me-most of my appraisals have been very good & pleasantly surprised by myself-also iv had a few bummers with apprs. that reflected stones not good or as good as i thought-overal what i have is very nice-many rare stones with apprs. that really blow me away-these stones were bought years ago when buying them was a little safer than today-one should b a little more careful because there is more of the bad guys out there for their own profit with little care about you-b aware-most of the appraisals i have are all very close in value by appr. even done by different people in the business-these apprs. r for ins. purposes for replacement value-almost all of these figures r verified by jewelers i know in the business-in some cases these people ask me how i can buy such good stones at such low prices-the right place at the right time-the market does change but like diamonds good gems are almost always in demand-my 2.5 cnts...

 

[Arkteia]

Date: 2/20/2010 5:55:28 PM
Author: LovingDiamonds
Crasru - there is NO need to apologise at all and you certainly don''t need to put yourself down either.

You know, we all have to start somewhere. Some start at the top, some start with fish gravel - that''s the way it is!

You''ve come from a Country and seen and done things that most of us couldn''t even imagine so I understand your statements about war.

My only advice to you is that even though you started collecting gemstones/jewellery later than you would have liked, it doesn''t mean anything. It actually means you probably have the funds to avoid the fish gravel! However, buy slowly. Do tons of research. Post up tons of questions and really educate yourself (as I know you have been doing). That way, you won''t buy expensive fish gravel! Hopefully in 5-10 years time you''ll have a wonderful collection of statement pieces.

You know, LD, I think I should actually thank all of you for helping me and spending time educating me. Because I know you all are highly-paid professionals and, among other things, your time is very valuable - the fact that you are willing to spend it on me is amazing.

I almost cried yesterday when I followed this "sapphire" thread - Chrono and LostSapphire were giving me advices on purchasing sapphires. They spent their time, showed me the color scale which I am going to use now (thanks, Chrono!), tried to do their best.

I really value and deeply respect all of you and your time. Not to say anything about the collections.

 

[Harriet]

Crasru,

Would you mind clarifying what you mean by "investing?" To me, investing means assembling a portfolio of assets with justified belief that they yield returns. My husband is an investment professional and looks for relatively liquid instruments. He builds financial models to determine whether something is of value. This requires a certain degree of transparency in the markets. Not only is that missing in the gem market, gems are illiquid. The reason I have a number of stones that have appreciated is luck, not skill. That''s why I view my collection as consumption, not as a portfolio.

I understand what you''re saying about the IRS auditing people who have taken suspiciously high deductions.
Maybe donors are safer using appraisers that the IRS uses.

I learn from helping people and would be happy to help you, if you can identify what it is that you hope to achieve by buying gems. Since you''re diving in the deep end, I''d suggest going to as many museums and gem shows as possible. Nothing beats handling stones.

 

[Arkteia]

Date: 2/20/2010 7:19:43 PM
Author: Harriet
Crasru,

Would you mind clarifying what you mean by ''investing?'' To me, investing means assembling a portfolio of assets with justified belief that they yield returns. My husband is an investment professional and looks for relatively liquid instruments. He builds financial models to determine whether something is of value. This requires a certain degree of transparency in the markets. Not only is that missing in the gem market, gems are illiquid. The reason I have a number of stones that have appreciated is luck, not skill. That''s why I view my collection as consumption, not as a portfolio.

I understand what you''re saying about the IRS auditing people who have taken suspiciously high deductions.
Maybe donors are safer using appraisers that the IRS uses.

I learn from helping people and would be happy to help you, if you can identify what it is that you hope to achieve by buying gems. Since you''re diving in the deep end, I''d suggest going to as many museums and gem shows as possible. Nothing beats handling stones.

Hi Harriett,

First of all, thank you for you kind offer to help me with buying gems. I am trying to formulate what I am trying to achieve.

- I want to buy some gems that could make me feel better, even if I wear them day by day, just enjoy looking at them
- I would like to buy some gems that are priced high for a reason (e.g. alexandrites, demantoids, good sapphires, possibly Paraibas)
- It is not an investment in a way of "selling it later at a huge profit". I do not know which word to use - it would be nice to buy a stone that is beautiful and affordable now but may cost much more several years down the road. Not for investment. Just buy it now when it is more affordable.

Most important: I do not want to make really bad mistakes in the process. Today we went out to eat; the lights were dim and I looked at my alex and felt that I bought it for a reason because the color was almost pure red. Each time I look at the ruby, however, I feel halfway angry - I like the color but I know I made a mistake because I bought H(a) at a high price without researching the subject.

So that is probably the main goal: to buy a stone that I could set nicely, wear every day and feel good about it. I am not as savvy as other people and would not be surprized if I still end up overpaying. But there is a difference between buying it at a slightly higher price and paying a delusional price for it. At this point in time I am trying to avoid delusional prices - we all work hard for our money, don''t we?

I simply do not have the knowledge, resources or contacts to buy stones for investment. But eventually I would like to end up only with the stones that I would wear, not keep.

As to IRS appraisers - it makes sense, I just did not know they used appraisers.

Again, thank you for your offer to help. I surely need it!

 

[Sagebrush]

All,

Here is the full text of part I of a two part series I wrote on appraisals, I welcome your comments.

Getting an Appraisal; Some Do’s and Don’ts

Gems: Grading the Crème de la Crème, Part IV

By Richard W. Wise, G.G.

©2006

In the last three posts on this subject I discussed some of the rare characteristics that make certain gemstones so valuable. Value is naturally of great interest to the gem connoisseur/collector. How does a collector determine if he is paying the right price? In other words how does one go about establishing the value of one of a kind, ultra-fine gems?

First let’s establish what you don’t do. Don’t take the stone to your local jeweler even if he is a graduate gemologist unless he stocks comparable qualities of the gem in question. Most local jewelers know colorless diamonds but few have a working knowledge of colored gemstones. As with any sort of appraisal, the prospective appraiser should have a thorough day-to-day familiarity with the gem to be appraised.

Familiarity is easy enough to establish. If ruby is the gem at issue, go to the jeweler and ask to see his rubies. If he stutters and stammers and suggests he can have anything you want in the store in a matter of days, move on. If he doesn’t stock the stone, he doesn’t know the stone.

Watch out for the low-ball…

If the potential appraiser’s first statement, after you show him the gem and tell him what you paid is, “you paid way to much for that stone.” Run like hell! Why, because I guarantee that the next words out of his mouth will be: “I could have gotten you a similar stone much cheaper.” These are not statements made by a disinterested professional they are what they sound like, the words of a jealous competitor. The practice is so common it even has a name; low-balling. Some jewelers low-ball because they believe if they can discredit the competition, they will get the business. What actually happens is that the client becomes distrustful and the whole profession is discredited. If a low-ball raises a question in your mind; call the person’s bluff: “Ok, show me a better one, cheaper!.” Usually that will end it. Recently a client of mine went one better, he asked to be shown a comparable stone and agreed to buy it if the dealer came up with one. He still has my stone and is yet to see a match.

The next possibility is a professional appraiser. Over the past two decades gem and jewelry appraisal has become professionalized. There are three major appraisal organizations: The National Association of Jewelry Appraisers (NAJA) http://najaappraisers.com/ , The International Society of Appraisers (NSA) http://isa-appraisers.org/ and The American Society of Appraisers (ASA): http://appraisers.org/. These organizations have standards of education and codes of ethics to protect the client. In addition they use methodologies that provide some assurance of accuracy. However, I think the same standard applies. Does the appraiser have experience with the gem in question?

How often have I been asked for a: “Just off the top of your head, I won’t hold you to it” appraisal? An appraisal is worth what you pay for it. A good appraisal takes time and time is money. Jewelers who give out this sort of verbal appraisal are doing neither their client nor their profession any good. Courts in some jurisdictions have held that a free appraisal is worth just what you paid for it…nothing! And, by the way if you are a professional you may be “held to it” in a court of law. Jewelers are not the only ones who do this sort of thing, professionals do not always act professionally. May I offer a cautionary tale?

Take me out to the ballpark…

About two months ago I sold an extraordinary 3.30 carat Burma Ruby (pictured) The client, rightly concerned with value, wanted the gem appraised. He asked me if I could recommend and appraiser and aside from the ethical problem of the seller making such a recommendation I had a tough time thinking of anyone other than a wholesale dealer specializing in rubies with experience enough to do it and wholesalers do not know the retail market. To aid the client I obtained an American Gemological Laboratory full quality report. The AGL report graded all aspects of the gem and issued an overall quality grade. I highly recommend this report for important gems. It provides one objective basis to begin the valuing process. (see the report at www.rwwise.com, click gallery, gemstones, ruby)

The client then contacted a professional member of one of the organizations listed above and asked the appraiser for a ballpark estimate and faxed the AGL report to the appraiser. Without ever seeing the gemstone, this appraiser gave the client a “ballpark” price that was so ridiculously low that the client, who had been looking for a ruby for several months realized the price was absurd and decided he needed another appraiser.

How could any professional appraise a gemstone without examining it? You’ve got me! In the case of this so-called professional, he hit a foul ball. Luckily, the client knew more than the appraiser otherwise I might have lost the sale.

The client then asked two well known gemologists, Richard Drucker and Stuart Robertson of Gem World International publisher of The Guide, a wholesale gemstone price guide, to do an appraisal. In a subsequent article in Gem Market News written on appraising this ruby here is what Mssrs. Drucker and Robertson said this stone:


“Pricing this ruby was a challenge…The color was at the top of the spectrum…”

“we looked for comparables…Rubies of this caliber cannot be priced by the cost method and only market data will suffice…”

“…This becomes a gem for the collector’s category and that is an important lesson in pricing. The stone is an example of a gem that grades above The Guide’s extra fine category.”

Gem Market News, Vol. 25, No. 5, September, October 2006, p. 12

Evaluating an ultra-fine gem is difficult because, as Drucker says, you must find comparable stones and if you can’t find comparables you are like a tight rope walker dressed in his underwear balanced on a high wire working without a net. In the end, Drucker & Robertson, after consulting a number of dealers, appraised the stone for substantially more than the client paid and several times the price suggested by Mr.ballpark the professional appraiser.

To sum up, if you want a gem, any gem, appraised. Find a professional with demonstrated familiarity with the gemstone. Check the credentials of local jewelers by checking what they have in their inventory. If they don’t stock the stone, they don’t know the stone. Choose a disinterested professional and pay the price. Don’t expect something for nothing, get a signed document and watch out for foul balls and low inside drives.