Freakonomics diamond auction

[McGinnis]

On eBay.
Anyone else listen to the recent Freakonmics podcast on diamonds?
Sort of made me feel queasy. We all knew this about diamonds and its value but hearing it straight from Dubner's mouth made me want to return my stone and get on one knee with a bond.

 

[Texas Leaguer]

On eBay.
Anyone else listen to the recent Freakonmics podcast on diamonds?
Sort of made me feel queasy. We all knew this about diamonds and its value but hearing it straight from Dubner's mouth made me want to return my stone and get on one knee with a bond.

I heard part of it and I of course did not like the sound of it or the fact that it was being broadcast to a huge audience. I also found some of the basic "facts" to be wrong, incomplete or misinterpreted. From what I remember he suggested that the diamond market is artificially manipulated by the industry and the "overhang" could cause the value of diamonds to collapse at any moment. There was no mention of the fact that rough supplies are continuing to dwindle as the major sources are being depleted, new discoveries are few and far between, and costs to recover diamonds from the ground keep increasing. There is also not a ready vehicle for bringing large supplies out of "laundry rooms" and into the market, such as you could with currency,precious metals or stocks.

It sounded to me like pure sensationalism rather than serious reporting and I was disappointed in NPR and Marketplace for that. It makes me call into question other news I hear on that program which I listen to regularly.

Maybe it just hit a nerve with me. I should listen to the program again. I will be interested to see other reaction here.

 

[denverappraiser]

Newsflashes about how diamonds have no real value come along fairly often but none have had the impact of Edward Epstein's 1982 article in The Atlantic titled 'Have you ever tried to sell a diamond?'. It's actually referenced by the Freakonomics people and it's the bottom line of nearly all of these things.

Here's the whole article. It's a bit long but for people into diamonds it's definitely worth the read.

http://www.theatlantic.com/magazine/archive/1982/02/have-you-ever-tried-to-sell-a-diamond/304575/

It's a good read and obviously not very complimentary of the diamond business. In a nutshell, his points are:

1) Diamonds are only worth what you can get for them.
2) Diamonds are a lot more common than most people think and they are completely unnecessary.
3) The diamond business has a giant player behind the scenes who isn't necessarily acting in your best interest.

#1 I have some serious conceptual issues with and it's the whole premise of the piece. If you can't sell it it has no value. If you paid more than you can get then you have been ripped off. You know, like food, cars, entertainment, electronics, video games, antiuqes, artwork, lawnmowers, gasoline clothing, books and nearly everything else you buy. Try selling a 5 year old phone that cost you $500 and see how that works out. I'm hard pressed to think of anything you buy that meets this standard of being worth what it costs if that's what value means.. There are a few that do better than others, like houses, but as tough as they are to sell, diamonds actually are better at this than most of what you buy. Why then is it so common that people EXPECT diamonds to be so different? That strikes me as the heart of the problem. The couple in the story had a completely unreasonable expectation and the Freakanomics people didn't mention it even once as even a contributor to the problem.

#2. Yes, diamonds are more common than most people think, but that's hardly scandallous. Lets just look at engagement rings. There are something like 100 million marriage age women in the US. (ages 18-70). I think something like half of those are married already and half the remainder will do so at least once in their lives. A fair number of those currently married ones are going to do it again. Nearly every one of those transactions involves a diamond. Add to that the fact that men wear diamonds, plenty of women have more than one (some have a lot more), and there are diamond customers outside of the United States and yes, we're talking abut a lot of diamonds. Millions of them every year. Actually, one of the problem is that demand is so high that the mines aren't even close to being able to keep up with the demand. That leads to what he calls the overhang and it's what I count as the most interesting part of the piece.

Diamonds last a long time. People don't. That's where diamonds really shine over, say, phones or cars. Nearly every diamond ever mined is still out there somewhere. That makes for a lot of rocks in jewelry boxes, in the bottom of drawers and in safe deposit boxes that MIGHT hit the commercial market. A lot of them do just that. The market for 'recycled' diamonds is nearly as big as the market for freshly mined ones. This is the part that feels like a conspiracy. If all of those diamonds hit the market at once, prices would drop. The transaction costs associated with reselling diamonds (or anything else) are higher than people generally expect and all of those middlemen seem like they're cheating. If people en mass figure out that it's possible go get married without a diamond at all, demand will drop.

All of that is true …. and completely irrelevant. People buy diamonds because they like them, not because they need them. The diamond tradition is spreading around the world, not cutting back. There is zero indication that this is likely to change any time soon. Marketplaces do indeed involve a lot of middlemen, and for a variety of good reasons. Again, try and sell nearly anything else you own other than stocks and bonds and real estate. To the extent there's a problem here it's with the way economies work, not with diamonds per se. Mind you, I'm not convinced it's a problem at all but subject the subject is far beyond this article. People get PhD's in this.

#3 Then there's DeBeers. The giant evil corporate behemoth from colonial South Africa that invented the idea of putting a tollbooth at the gates of marriage and who have been milking it for over 100 years. The story of DeBeers Consolidated Mines is indeed pretty interesting. Their historians like to argue that they were extraordinarily clever and the cynics would call them awfully lucky but whatever you call it, it's a compelling story that's full of intrigue. They definitely were in the right place at the right time and they definitely made and continue to make some money at it. Does it matter? Not that I can see. They have a 40% global market share in the mining business. That's nothing to scoff at, but it's hardly the monolithic control that gets attributed to them. They've been in that neighborhood for decades. Heck, the 90% control they used to have isn't even what folks think it was. The majority of the 'value chain' occurs at the cutter, shippers, traders, advertisers, taxers, laboratories and retailers that all happen later. 90% of the mining business does not mean 90% of the diamond business, and that completely ignores the secondary market mentioned in #2 above. DeBeers can and does exert market pressure on their customers, the cutters, but most of the diamond business that people think of actually occurs after that. It's like complaining about the price of cake and blaming it on the wheat farmer.

Not that it matters but the idea that marriage is a commercial transaction was hardly invented by deBeers. Historically it was a deal made with the parents of the bride, not the bride herself and that's the bit of luck for the DeBeers folks. The decision of who should marry whom and who gets to make that choice changed drastically right about the time that DeBeers started. They had almost nothing to do with it but they sure found a good way to monetize it.

 

[Karl_K]

All of that is true …. and completely irrelevant. People buy diamonds because they like them, not because they need them. The diamond tradition is spreading around the world, not cutting back.

While much of what you say is good the simple truth is that most diamonds by value are bought because that is what is expected if one wants to get engaged not because someone specifically wants to spend money on a diamond.

 

[denverappraiser]

That's another unusual attribute of diamonds, particularly engagement diamonds. The customers are young men while the consumers are young women. He doesn't want a diamond, he wants the girl. Although it's true that since it's intended as a gift and therefore the issue is his expectation of whether SHE will like it, the effect is the same. FWIW, they almost always work. Many women DO seem to like them.

 

[Texas Leaguer]

If a news organization wants to do an interesting and truly relevant piece on the diamond industry, rather than dredge up and regurgitate old concepts based upon market dynamics of the past, they should investigate how information technology is revolutionizing they way diamonds are bought and sold.

In the process they would demonstrate that, thanks to much more available information, selection and competition made possible by the internet, astute consumers are buying at very sharp prices today radically shrinking that delta between price paid and liquidation price. No longer are consumers limited to the two or three shops in town - they can shop a hyper-competitive global market being created by e-commerce. And competition from e-tailers harnessing new economies of scale is helping to drive margins down in the shops so that even consumers who do not shop on the internet benefit from a more buyer-friendly landscape. And of course the internet gives consumers various tools with which they can liquidate their diamonds, presenting them to a much wider audience than ever before and no longer being restricted tor a few offers from businesses in their town.

The entire industry has been in convulsions trying to adapt to this revolution. And it is only in its infancy! Debeers themselves made a major shakeup a few years back paring down the number of manufacturers they distribute rough to and requiring those companies to do more in terms of vertical connection with the consumer. And we see dramatic effects of that strategy taking hold. We even see how consumer demand for better cutting driven by the self-educating new age consumer is significantly improving diamond craftsmanship.

There are also efforts being made by influential entities to create a more effective and equitable exchange for recycled diamonds where consumers can get a better and more predictable return on their purchases. This concept is still in infancy too, but it just makes too much sense not to eventually take hold.

As Neil pointed out, a diamond is already a better long term value than almost any other expensive consumer purchase you can think of. The developments we see unfolding around us today are rapidly making the value proposition a whole lot better.

I think that taking a look at what is really happening in the diamond industry is far more interesting than resurrecting tired ripoff stories of yesteryear.

 

[WinkHPD]

Edward Epstein dedicated many years of his life trying to discredit and destroy the diamond industry.

He failed, miserably.

The overhang that he spoke of may have existed back in the 80's, but it is long since gone now and will never return. Neil has done an admirable job of discussing the 3 main points of the article and Like Texas Leaguer, I wonder when the media will tire of recycling this yesterday's news (cubed).

I love diamonds for pretty much the same reason my clients do.

THEY ARE PRETTY AND THEY SPARKLE AND I CAN SIT AND STARE AT ONE FOR HOURS.

Obviously, they appeal to my inner magpie, and I am NOT alone.

Wink

 

[hiratop]

Since they are beautiful, potentially timeless and seemingly made of light they can be a symbol for spirituality, the divine and transcendence.

 

[Texas Leaguer]

Since they are beautiful, potentially timeless and seemingly made of light they can be a symbol for spirituality, the divine and transcendence.

I love it! And I may steal it.

 

[Rockdiamond]

I'm also an avid NPR listener.
The first couple of seasons of Freakonomics were amazing.
But at this point they are scraping the bottom of the barrel IMO.
I did not even hear the diamond story there- but as far as the overall concept of the show, they seem to have run dry.

 

[McGinnis]

Edward Epstein dedicated many years of his life trying to discredit and destroy the diamond industry.

He failed, miserably.

The overhang that he spoke of may have existed back in the 80's, but it is long since gone now and will never return. Neil has done an admirable job of discussing the 3 main points of the article and Like Texas Leaguer, I wonder when the media will tire of recycling this yesterday's news (cubed).

I love diamonds for pretty much the same reason my clients do.

THEY ARE PRETTY AND THEY SPARKLE AND I CAN SIT AND STARE AT ONE FOR HOURS.

Obviously, they appeal to my inner magpie, and I am NOT alone.

Wink

^2

I should switch my username to magpie.

 

[chikoo]

Another NPR fan here. Love how freakonomics plays with number and facts

In my opinion, Diamonds are like cars. Not a real investment unless you bought a real unique one. On the other hand, Gold is the same, and there are no levels of gold sold commercially based upon 4 or 5cs. So buy a diamond to suit the occasion just like you would for a car, and dont expect it to rise in value, let alone retain value.

 

[ElleK]

My husband brought this podcast to my attention, but I have yet to find the time to listen. I look forward to listening to it even more after reading your thoughts and hoping that I will get the time tomorrow.

 

[bcavitt]

In my opinion, Diamonds are like cars. Not a real investment unless you bought a real unique one. On the other hand, Gold is the same, and there are no levels of gold sold commercially based upon 4 or 5cs. So buy a diamond to suit the occasion just like you would for a car, and dont expect it to rise in value, let alone retain value.

If I had a nickel for every customer who walked in wanting to sell us a diamond thinking it was an investment...

 

[denverappraiser]

The analogy of cars is a common one in that they both take a hit in 'value' when you drive it off of the showroom floor but there's a critical difference. With cars, as with most things, that depreciation keeps on going. Every year it goes down a little more until it finally reaches zero 20 years and a few hundred thousand miles down the road. Assuming you don't damage them, diamonds don't really change very much with time. Fashion changes and markets change but the rock is still just a rock. To the extent that diamond customers take a hit, most of it happens on the first day and, as Brian points out, that's actually dropping as the Internet is making the selling process more efficient. The profit margin of that front end dealer is way down, as is the money available for that pawn shop at the other end.

The expectation problem, on the other hand, seems to getting worse. People buy a diamond that's claimed to be worth $10,000 from some discount house for $5,000, wait a few years, and then expect to sell it for MORE than $10k. Prices are up after all. Somehow it doesn't matter that the reason the first seller sold for $5k is that that's the most they could get. The $10k was fiction right out of the gate. It wouldn't even matter if someone else would have done it for $3k. That's history. It matters not that a similar diamond is worth more when bought from a real jeweler for an assortment of reasons like warranties, confidence, safety, selection, finance and so on. These are roughly the same reasons everything else is worth more when coming from a pro by the way. People somehow expect that it's a bank account or at least gold bullion. Context matters. Markets matter. That's WHY dealers can and do charge more. I'll put it another way. Is that gas station sushi a bargain?

I get calls often that sound like this: “I have a quick and easy question. How much have diamonds appreciated since 1992?”. Easy question? Hah. There are implied assumptions in there that are almost certainly false. There are way more variables than they know and anything even close to a straight answer would almost certainly be hugely misleading. Then they get miffed when I suggest that perhaps an appraisal is in order.

BTW, here's the link to the Freakanomics podcast that started this.

http://freakonomics.com/2015/04/16/diamonds-are-a-marriage-counselors-best-friend-a-new-freakonomics-radio-podcast/

If anyone want's to buy their diamond, or just monitor how it's going, it's for sale on eBay here:

http://www.ebay.com/itm/FREAKONOMICS-CHARITY-DIAMOND-1-000ct-F-GIA-Princess-VS2-/121623148342

 

[chikoo]

I actually realized that denverappraiser. I wanted to go back and edit it to equate it to a painting. The value is subjective and just because you buy a painting does not mean it will become a Mona Lisa as much as you would like it!

Which brings me to another question. Has anyone experienced or seen or heard of a diamond bieng appraised differently over time by the very same appraiser? For example I got a diamond that you appraised it as D SI1 XXX. 5 years later my x wife walks in with the stone and you appraise it for G SI2 XXX ?

 

[denverappraiser]

Sure. It happens all the time. An appraisal is an estimate of value for a particular item under a particular set of circumstances and on a particular date. In the case of most jewelry appraisals,the circumstances in question are an estimate of what it would cost to replace it with another of like kind and quality, at retail, new, locally (among other things). Can that change if you change nothing but the date? Absolutely. Should you expect a different value conclusion if you changed the circumstances? Of course.

 

[WinkHPD]

Edward Epstein dedicated many years of his life trying to discredit and destroy the diamond industry.

He failed, miserably.

The overhang that he spoke of may have existed back in the 80's, but it is long since gone now and will never return. Neil has done an admirable job of discussing the 3 main points of the article and Like Texas Leaguer, I wonder when the media will tire of recycling this yesterday's news (cubed).

I love diamonds for pretty much the same reason my clients do.

THEY ARE PRETTY AND THEY SPARKLE AND I CAN SIT AND STARE AT ONE FOR HOURS.

Obviously, they appeal to my inner magpie, and I am NOT alone.

Wink

^2

I should switch my username to magpie.

We could start a Magpies Anonymous group. Lots of fellow Magpies here I am thinking...

 

[WinkHPD]

I actually realized that denverappraiser. I wanted to go back and edit it to equate it to a painting. The value is subjective and just because you buy a painting does not mean it will become a Mona Lisa as much as you would like it!

Which brings me to another question. Has anyone experienced or seen or heard of a diamond bieng appraised differently over time by the very same appraiser? For example I got a diamond that you appraised it as D SI1 XXX. 5 years later my x wife walks in with the stone and you appraise it for G SI2 XXX ?

Chikoo,

I could understand the appraiser seeing a stone after five years could well call a diamond an SI2 after having declared it an SI1 years ago, especially if it is a borderline call.

What I would be less understanding of is going from a D to a G and that would bring the grader's competence into question for me. It raises questions into my mind, ie, did the vendor offer the appraisal on an unpapered diamond and now is offering a buy on that same unpapered diamond? If so, perhaps his ethics are needing a serious looking at. (This kind of ethical dilemma can be avoided by having one of the top tier labs, such as GIA or AGS paper the diamond before purchase.)

If you are asking an extremely competent appraiser such as Denver Appraiser if he is going to grade a D colored diamond from five years ago that HE graded, as a G, I can not imagine that ever happening.

1. He would have graded it properly five years ago as he was not involved with the sale of the diamond.

2. He will grade it properly today, as he will not both appraise and buy a diamond from you. It's that ethics thing.

As to your original question, yes, I have heard of it, rarely fortunately, but yes. Refer to that ethics thing as to my suspicions as to why.

Wink

 

[denverappraiser]

Sorry, you edited things after I started writing the response. No, color, clarity, size and the like don't change with time. As Wink points out, there may have been a borderline call that can change and there's always the possibility of an error on one or both appraisals. Lastly there's the condition issue. Obviously damage is a big deal.

The usual scenario is with different appraisers. One guy said one thing and a second guy said something different. Changes in the description can lead to important changes in the value conclusion.

 

[Texas Leaguer]

In my opinion, Diamonds are like cars. Not a real investment unless you bought a real unique one. On the other hand, Gold is the same, and there are no levels of gold sold commercially based upon 4 or 5cs. So buy a diamond to suit the occasion just like you would for a car, and dont expect it to rise in value, let alone retain value.

If I had a nickel for every customer who walked in wanting to sell us a diamond thinking it was an investment...

Agree. And unfortunately the trade are largely to blame for this perception, especially in regards to the misuse of appraisals. But I will not excuse consumers entirely because some do shop around for someone who will tell them what they want to hear.

Past history also played into the equation to an extent. In the days when DeBeers did exercise dominant control they were able to largely keep prices steadily climbing, feeding into the notion that diamonds would keep appreciating in value. Sellers would of course eagerly point to that as part of the value proposition of whatever diamond they were selling. Now that diamond prices are subject to more organic forces of supply and demand, we see much more price volatility.

The takeaway is, as Neil suggested, there is real value in dealing with merchants and appraisers who know their stuff, have a track record of ethical practice, and who do not blow smoke or play games. The good thing for consumers is that, with information and reviews so much more accessible today, it is easier to find good folks and harder for the fraudsters and shady characters to hide.

 

[denverappraiser]

In my opinion, Diamonds are like cars. Not a real investment unless you bought a real unique one. On the other hand, Gold is the same, and there are no levels of gold sold commercially based upon 4 or 5cs. So buy a diamond to suit the occasion just like you would for a car, and dont expect it to rise in value, let alone retain value.

If I had a nickel for every customer who walked in wanting to sell us a diamond thinking it was an investment...

Agree. And unfortunately the trade are largely to blame for this perception, especially in regards to the misuse of appraisals. But I will not excuse consumers entirely because some do shop around for someone who will tell them what they want to hear.

Past history also played into the equation to an extent. In the days when DeBeers did exercise dominant control they were able to largely keep prices steadily climbing, feeding into the notion that diamonds would keep appreciating in value. Sellers would of course eagerly point to that as part of the value proposition of whatever diamond they were selling. Now that diamond prices are subject to more organic forces of supply and demand, we see much more price volatility.

The takeaway is, as Neil suggested, there is real value in dealing with merchants and appraisers who know their stuff, have a track record of ethical practice, and who do not blow smoke or play games. The good thing for consumers is that, with information and reviews so much more accessible today, it is easier to find good folks and harder for the fraudsters and shady characters to hide.

This SHOULD have been where the Freakonomics people went with this. The theme of the article had to do with how people see a financial windfall differently, but they quickly devolved into the same old nonsense about diamonds.

Did the jeweler treat them badly? Heck no. He/she donated a diamond to a charity for Heaven’s sake. What’s wrong with THAT? Thank you for your generous support.

What about the appraiser? The one who said it was ‘worth’ $7500. I see no particular reason to think they did anything bad either. I’m not wild about some of their language on the report but a 1.00/F/VS2/princess/GIA in the database here is offered for about $5000-$7000 depending on the details. That’s putting a $1-2k markup to get it to retail local, which is actually pretty reasonable as long as that’s really the appropriate grading. As appraisals in this sort of circumstance go, that’s actually surprisingly low. They made no statement at all about resale value and, in fact, specifically say in their report that they’re talking about retail replacement and that they’ve applied what they consider to be the average national retail markup to get to their value conclusion. If anything they’re a little low.

What about the charity? Did they misrepresent something? No, I don’t think they did, or at least they didn’t do anything that every charity auction does on every item they sell. Again, I’m a bit surprised they didn’t provide a report that said it was worth even more than they did. They probably didn’t know, nor should they really be expected to. They relied on experts to tell them what it was and what it was supposedly worth. That’s what they always do. That’s what they’re SUPPOSED to do.

How about Epstein? Is he wrong? No, not really, although I think he deliberately stretches a few things to support his conclusion and I think he’s deliberately missing some key things in order to attack his boogieman but most of what he had to say is (or was) basically correct.

That leaves the customer and NPR. The customer bought a raffle ticket and won. That's all. No problems there. They want to get as much out of it as possible. Again, no problem. Everybody selling anything wants that. The eBay ad doesn’t even seem to suggest they went in with an unreasonable foregone conclusion of what to expect or that they're in any way misrepresenting anything. That portion is coming from NPR. They wanted to make a scandal where none existed before, and they drummed up an ‘expert’ who gave them something to talk about. Sorry, it doesn't take all that much research to know better. They’re a major national news outlet with an audience of millions who had plenty of opportunity to research this piece. They could have done better. They should have done better.

 

[Karl_K]

Something else to consider.
I know of someone who had a gia 1.5 ct d-vvs1 round that was purchased years ago and should have seen a nice increase in value maybe even enough for a nice profit. A buyer wanted a new gia report and it came back as a GIA good cut.
They did end up breaking close to even but with inflation they lost money because the market and cut grading had changed.
I looked into recut for them but the numbers did not come out because it would drop well below the 1.5ct point.

 

[Texas Leaguer]

Something else to consider.
I know of someone who had a gia 1.5 ct d-vvs1 round that was purchased years ago and should have seen a nice increase in value maybe even enough for a nice profit. A buyer wanted a new gia report and it came back as a GIA good cut.
They did end up breaking close to even but with inflation they lost money because the market and cut grading had changed.
I looked into recut for them but the numbers did not come out because it would drop well below the 1.5ct point.

This is an interesting point. It is the kind of thing GIA wanted to avoid which caused them to drag their feet so long before finally coming out with a cut grade on any report. It is the reason that their cut grades are broad and forgiving, and it is the main reason they probably won't be adding princess cuts (or any other fancies) to their cut grade menu any time soon. In a market full of mediocre to poor cuts (aka "good") that people are representing as top cuts, there is much value to be lost on the part of anyone holding inventory. Which means all of GIA's clients!

In a perfect world where no compromises on cut quality were taken in the manufacturing process, this would cease to be an issue.

 

[denverappraiser]

Something else to consider.
I know of someone who had a gia 1.5 ct d-vvs1 round that was purchased years ago and should have seen a nice increase in value maybe even enough for a nice profit. A buyer wanted a new gia report and it came back as a GIA good cut.
They did end up breaking close to even but with inflation they lost money because the market and cut grading had changed.
I looked into recut for them but the numbers did not come out because it would drop well below the 1.5ct point.

To me much of this is mostly a fashion component. Today people want that GIA-x cut grade, especially the sort of people who would spring for a 1.50/D/vvs1. On resale I probably WOULD seriously consider recutting such a stone to get rid of a 'good' cut grade for exactly the reasons you describe. That's a very tough sell. The upside is the possibility of cutting out whatever it is that makes it vvs1. D/IF/GIA/xxx will bring a considerable premium that quite possibly would offset the smaller size.

Diamonds are fundamentally a fashion product. Spready stones used to sell for a premium because they faced up bigger. It was a different way of looking at things. In all honesty, weight is sort of a dumb metric after all. Face up size really is more intuitive. A similar problem faces people with, for example, marquise cuts. Back in the 80's they were hot and sold for a premium. They're just as beautiful now as they ever were but fashion has changed and they're hard for people to sell. (Marquise's seem to be coming back by the way). It's a market problem and this all is certain to change again. We don't know what are grandkids are going to like but it's near certain to be different from what we like. That's how the world works. It's for the same reasons that our own preferences are different from our grandparents.

 

[Diamond_Hawk]

Something else to consider.
I know of someone who had a gia 1.5 ct d-vvs1 round that was purchased years ago and should have seen a nice increase in value maybe even enough for a nice profit. A buyer wanted a new gia report and it came back as a GIA good cut.
They did end up breaking close to even but with inflation they lost money because the market and cut grading had changed.
I looked into recut for them but the numbers did not come out because it would drop well below the 1.5ct point.

I was initially struck by the similarities you might make to the car analogy here. What if you knew someone who purchased a 1975 Mercury Comet, drove it rarely, kept it in immaculate condition and should have seen a nice price increase maybe even for a profit to sell it today. Well, by the time they had to bring it up to emissions code to meet new EPA standards (this is the comparison to the new cut quality) all the value could be lost. This analogy, of course, falls victim to the depreciation argument, and the fact that most cars are grandfathered into the new laws, but the concept I think is the same. As new technologies are developed (or required) in the assessment of our property there will, no doubt, be 'flaws' exposed in the older makes.

Which makes me ponder, what if cut-grading had taken the same turn as emission standards and the GIA had simply 'grandfathered' all the pre-2005 graded diamonds into cut-grade "Very Good or Better"

 

[Karl_K]

I looked into recut for them but the numbers did not come out because it would drop well below the 1.5ct point.

To me much of this is mostly a fashion component. Today people want that GIA-x cut grade, especially the sort of people who would spring for a 1.50/D/vvs1. On resale I probably WOULD seriously consider recutting such a stone to get rid of a 'good' cut grade for exactly the reasons you describe. That's a very tough sell. The upside is the possibility of cutting out whatever it is that makes it vvs1. D/IF/GIA/xxx will bring a considerable premium that quite possibly would offset the smaller size.

If it had been mine I would have sent it off for a recut evaluation but my quick calculations based on the gia numbers showed a big weight loss.
When they were offered what they paid they jumped at it because they were nervous about the idea of sending it off for for an evaluation with all the unknowns.
I did not view the stone to know if the clarity could have been improved but did mention it.
It was a friend of a friend type deal so they didn't know me personally which made the thought of sending it off even harder for them I think.