Review - Rapaport "State of the Diamond Industry" JCK 2008

[John P]

The Rapaport “State of the Diamond Industry” breakfast and seminar is highly anticipated each year. The 2008 event was at capacity, partly because the content is always useful and interesting, and partly because of a shocking upward adjustment in Rapaport's diamond pricing information that occurred just prior to JCK: People who were present wanted answers as well as opinions.

Note: Understanding the "State of the Industry" content will help to understand factors involved in the price hike.

 

[John P]

The State of the Industry

This was an update on how diamond markets in the world are changing due to the external forces of economics & globalization and internal forces like the restructuring of supply, demand and distribution. US dealers are facing new challenges (and opportunities). The falling dollar and stock prices are a hardship. Extreme oil wealth and millions of new Chinese and Indian buyers are influencing pricing trends felt here. This is especially true in big stones already and development of foreign demand is beginning to impact mid-quality goods.

External Forces

The US Dollar is losing ground as a store of value. In fact, many big companies are refusing to be paid in dollars. They would rather have rubles, shekels, rupees, etc. because if they receive $10,000,000 this week it will be worth tens of thousands less a month from now, simply sitting in a bank.

This impacts US jewelry stores since the competition for supply is now the guy in India who can buy diamonds you’re looking for with a stronger currency. Further, his consumers are more able to buy them than American consumers.

Rapaport compared the strong American economy of past times to a global craps table: As the dollar was booming more and more people from around the world came to sit at the table, investing in American interests and growing their money in the US market. Americans bought houses at low interest rates financed by global banks and it seemed the party would be forever… As long as the craps game was good people left other tables and injected their money into the American economy. We were on a roll.

Now there are new free markets emerging. There is a flood of dollars into China and India, resulting in a slew of jobs and a brand new “middle class” consisting of hundreds of millions of new consumers. With this growing middle class comes increased global demand for oil, food and commodities, so prices surge worldwide. Back in America those increased commodity prices make it hard for consumers to pay mortgages. Banks lose money, the housing boom ends and the dollar falls while prices for oil surge.

While the American “craps table” has gone cold new games are booming outside of America. Is it wiser for global investors to put their money into US banks or to invest in growing economies like India and China? The answer is easy. People are leaving our table in droves to go to the new, hot tables. In fact our own dollars are being taken to these places: US companies take advantage of emerging economies with cheaper labor and operating expenses. This results in fewer jobs in America and sends more money abroad. As the new craps games get stronger the world needs US diamond consumers less.

Another socio-economic reality is that there is more wealth in the world today, but it belongs to fewer people. There were 9.5 million millionaires in 2006. That figure was up 8.3% overall and up a staggering 20.5% in India. The total worth of millionaires worldwide is $37.2 trillion dollars; an 11.4% increase in assets. Too few have too much money: As less people hold more global wealth it reduces money in supply and the amount of fundamental consumption. In contrast, the prices of rare items (large stones as an example in our industry) can be driven up by those who want them and think nothing of buying them at staggering prices.

Several covers from The Economist, Newsweek, etc., were shown which reflect trends in our economy. Rapaport says a “Perfect Storm” of sorts is being created by high-dollar inflation, globalization of demand and a new socio-economic order.

 

[John P]

Internal Forces

Demand continues to be greater than supply. This trend is projected to continue and increase (slide below) as a worldwide middle class emerges and grows. Moreover, market segmentation will occur as a by-product of demand.

Rapaport says the diamond industry does not control pricing. Demand “is what it is” and prices are influenced accordingly. If more people want red shirts in the world you can just create more cotton and shirts – but you can’t create more large rough and you can’t create more F VS diamonds than nature has given (trusting that more diamonds will be coming out of South Africa than Florida). Therefore when emerging markets in China demand VS over I the prices for those goods rise accordingly.

Projections: Sales of big stones will not decline. More purchases might be made in Saudi Arabia than the US, but that will raise, not lower prices. Small, inexpensive stones won’t decline either, as they will be the first targets of new consumers in emerging markets and are currently successful in the US. The issue, he predicts, will be mid-quality goods. The US is over-inventory in them right now and as prices rise with development of foreign demand those goods may not move as easily.

Data: Since January 2007 Rap prices have increased around 5% for 0.50 ct goods, 30% for 1ct, 70% for 3 ct and a staggering 130% for 5ct (slide below). Comparables to 5ct stones would be oil; up 140%, and platinum; up 92% since Jan 07 (slide below).

As we move into the future be prepared for certain goods to fall out of supply. When that happens it will be a jolt. Prices for those goods will skyrocket and it becomes a super seller’s market.

Not all Gloom and Doom

Rapaport said that the increase in demand makes for opportunities, even when prices go up. A piece of sage advice he issued is that “non-mining profit in the diamond business comes from finding the right buyer for the right diamond at the right time for the right price; which includes adding value.” (!)

We can’t control these forces but we can control our own thing. Demand will continue and all of us must cope intelligently. Ultimately to stay in business prices don’t matter, making some type of profit matters. Wal-Mart’s motto is “sell for less” and there is nothing wrong with that. Rapaport says we must fight for the customer. The people that will remain in business are those who work smarter, add value and believe in the product. Margins are dead but the idea and symbolism of what we sell is not. In fact, it is more important than ever.

He further believes the global storm, like a forest fire, could be good for the industry. After all, following inflation in the 1980s it was the little guy that kept things going. He maintains that free, fair, efficient and competitive markets are the only way forward.

As an aside, I’ve adopted something Mr Rapaport said two years ago as a slogan when I am working with the dealers in our network: “Consumers are not becoming less educated.” This is great news for dealers who sell high quality for great value, extend sensible benefits and work to create goodwill with their clients. They will be the ones surviving.

Beneficiation

Rapaport did touch on the Diamond Dream (the idea that a New York socialite can spend money on diamonds in a way that helps the world’s poorest people) and Fair Trade Jewelry, but in a reduced manner this year. A clip from “The Diamond Road” was shown. For any who have not seen this three-part series I would recommend it.

 

[John P]

Questions and Answers

Following Mr. Rapaport’s address there was great consternation about the pricing adjustment to the Rap list which occurred just prior to JCK. According to some in the room it created havoc and an impossible situation with a sudden disparity in expectations and (arguable) reality.

This is a difficult topic because the Rapaport list is supposed to reflect global pricing trends, yet many also react to it and use it to set their prices. There were comments disputing the reality of the adjustment and questions: Is demand actually driving pricing that required this adjustment, or did Rapaport’s adjustment prior to the show create those increases itself? Some audience members believe Rapaport was not being responsible by making such a dramatic adjustment with no warning right before JCK.

Mr. Rapaport responded that his list is, and always has been, a guide. While based on intensive data gathering it is, ultimately, speculative. He believes in the list and he urged people - if they don’t believe such pricing is real - not to buy at those prices. When your supplier sees the back of your head as the answer to his pricing he’ll ask you to wait and work with you. If not, it means he is able to get those prices, in which case the adjustment was correct to begin with.

 

[John P]

Slide: Demand projections

 

[John P]

Slide: US Statistics

 

[John P]

Slide: Worldwide Sales

 

[John P]

Slide: Prices since January 2007

 

[John P]

Final slide: Commodities Movement (note platinum, oil and 5ct)

 

[John P]

I went back and reviewed my notes from last year's Rapaport session. Since 2005 there has been a lot of continuity. I find Rapaport's views to be astute, if somewhat ahead of the curve.

This is heavy stuff but it's thought-provoking and the message about the necessity of adding value is as true and real as it gets. With that said, if globalization of demand & restructured distribution is giving you a headache...here is a hangout thread with a lighter look at JCK, as well as some familiar faces.

 

[strmrdr]

Thank you Sir John.

We live in interesting times.

 

[diagem]

Date: 6/4/2008 1:26:32 PM
Author:John Pollard
The Rapaport “State of the Diamond Industry” breakfast and seminar is highly anticipated each year. The 2008 event was at capacity, partly because the content is always useful and interesting, and partly because of a shocking upward adjustment in Rapaport''s diamond pricing information that occurred just prior to JCK: People who were present wanted answers as well as opinions.

Note: Understanding the ''State of the Industry'' content will help to understand factors involved in the price hike.

This Rapaport is a funny guy...,

Same..., same...

 

[purrfectpear]

The whole global market thing makes sense to me. I''ve been making quite a bit by investing in internal index funds.
So according to the charts there, those with larger stones might actually be able to sell them for more than they paid for them by 2010? Looks like there might be more private sales and less trade ins

 

[LtlFirecracker]

Very interesting. It puts diamonds in context with everything elce that is happening with the global economy. I have a question. Might be a dumb one but I will ask. When I told my boyfriend (who has an MBA) that metal prices were going up he replied, "well that makes since." When I asked him why he said because we are heading towards a recession and that when that happens people invest less in stocks and more in durable goods like gold, or platinum, because they are items that will not go away, unlike stocks that can fall in harder times (esp if a company goes bankrupt). Do you think that this is true and that this is playing a role? Or is it more of global competition for the same goods that you talked about above that is playing the major roll in price increases? Or both?

 

[oser21]

Thank you John for this contribution. As I was unable to attend this speech, your summary helps me to get a clear view of what was discussed.

 

[oser21]

I guess an introduction is called for.
I run an office in Antwerp, as well as in London, UK, from where I sell to private clients.
It has been a couple of years since I last attended this forum, and have returned to it as an ally of Wink, Paul, Lieve & John and their compatriots in their pursuit for cut-perfection. Paul Slegers and I go back a long time now, and has become a supplier to me for the Infinity-cut diamonds.

 

[niceice]

Date: 6/4/2008 1:30:54 PM
Author: John Pollard

Not all Gloom and Doom
After all, following inflation in the 1980s it was the little guy that kept things going. He maintains that free, fair, efficient and competitive markets are the only way forward.

Consumers are not becoming less educated.

These are two concepts that I believe are factors which will define the future of the online diamond business... While some of the larger publicly traded companies seem to offer a larger selection of diamonds that they have never seen (with RARE exception) the fact is that they lack the ability to provide their clients with any semblance of actual customer service beyond the scope of pushing the electronic paper trail through the order fulfillment process. The more that consumers become more educated the more information they want and the less effective larger companies seem able to meet the desires of their customers. "The little guy" can adapt his operation to meet the ever changing demands of his/her customers from moment to moment to cater to the needs of a broader client base while the corporate conglomerates have to consider what effect each change will have upon their stock price and the mind of their stockholders.

 

[AndyMN]

Excellent reporting John, I feel like I was in Vegas at the presentation. I''m new to the site as well and look forward to future correspondence. I love this;

This is a difficult topic because the Rapaport list is supposed to reflect global pricing trends, yet many also react to it and use it to set their prices. There were comments disputing the reality of the adjustment and questions: Is demand actually driving pricing that required this adjustment, or did Rapaport’s adjustment prior to the show create those increases itself? Some audience members believe Rapaport was not being responsible by making such a dramatic adjustment with no warning right before JCK.
Mr. Rapaport responded that his list is, and always has been, a guide. While based on intensive data gathering it is, ultimately, speculative. He believes in the list and he urged people - if they don’t believe such pricing is real - not to buy at those prices. When your supplier sees the back of your head as the answer to his pricing he’ll ask you to wait and work with you. If not, it means he is able to get those prices, in which case the adjustment was correct to begin with.

What a great answer by Rappaport! The next couple of years after the election are going to be very interesting.

 

[John P]

Date: 6/4/2008 3:21:21 PM
Author: strmrdr

Thank you Sir John.

We live in interesting times.

True enough. Ben Janowski spoke to several of these issues several days before Rap. I posted his "top ten list" in Hangout - probably appropriate to add it here as well.

Original post.




Ben Janowski spoke about the top 10 concerns relative to our industry. This was one of the more well-thought sessions we saw. Here is a synopsis, and my reactions (my peers may or may not share my perceptions).

10. Distribution: A declining number of stores means there are fewer opportunities for real innovations and intensified competition for case space. The deepest selections are online, not in stores, meaning that retailers will become more reliant on the web to source stones.

Thoughts: Vertical integration can definitely come at diversity’s expense, though I think the current survivors are working smarter in addition to harder. One concern with this is the further commoditization/proliferation of “sure bet” shapes – round & princess – which already have the lion’s share of the market.

9. Volatility: More large mining houses may be moving to tenders; the rationale being that in a world of tenders do they need sights? No more buffering stocks means companies will look to move goods out.

Thoughts: In a world of tenders and auctions the big dogs might try to price others out of the game. On the other side of the coin, the largest players also carry the largest debt so this may not be practical.

8. Man-Made Diamonds (MMDs): Current productions currently sell out – will demand increase? There are no issues of geo-political conflict, clarities VS1+ are less meaningful in a non-natural stone so price points are more uniform. What if DeBeers becomes aggressive in this srea? Will the public ever accept them as an option?

Thoughts: It would take a campaign even more creative than “A Diamond Is Forever” to replace natural diamonds. MMD companies are selling but I see this as a niche market, no different than people who seek an unorthodox shape or people using something other than a diamond for their nuptials. Engagement rings are about romance. Synthetics, sims and lab-grown (MMDs) are cool with some people but a disconnect for the at-large market seeking the eternal romantic symbol, long-associated with nature.

7. Supply: New exploration is down. Demand is up and exceeding current supply. Price and cash preference with the weak dollar means goods are staying overseas. Will this be incentive for the development of MMDs?

Thoughts: With Canada steadily rising and, by 2016, producing enough to equal more than a third of current global supply I don’t see a true shortage as imminent. I think the crazy escalation of prices by upstream controlling entities (while they are still in control) is a more urgent matter, as it is rapidly pricing middle America out of collection categories in larger and now common sizes.

6. Channel Conflict: With expanding internet use price pressure intensifies. Affluent customers want to know they are getting a deal. Additional margin for service is possible but in the 5% range, certainly not 15%. Internet and low-margin models are far more efficient. In-store sales will continue but with more educated consumers. Retailers fight disintermediation at their peril.

Thoughts: Same as #10.

5. Margins: Large stones are hot and the weak dollar hurts here. Mid and lower markets will have a tough year. Suppliers are driven to deal directly with the public.

Thoughts: Same as #7.

4: Competition: Other luxury products are competing. In the past diamonds have held the high ground; identified with royalty, luxury, wealth and power. New symbols of luxury with better margins, sales and promotion are out there.

Thoughts: True, which means we as diamond producers need to “brand” the romance - as well as the cut, color & clarity of what we have to offer. If we market our product as numbers-and-letters-only we lose the eternal, natural symbolism which is the intrinsic value of diamond.

3. Banking: Credit levels are too high as a result of supply-driven financing. Some companies not be renewed and cut adrift in favor of other models. Banks love the internet model with low inventories, high turnover on short margins and national or global reach.

Thoughts: The practice of memo is a huge problem. Debt is rife in this industry and memo/credit instead of cash has brought the industry to its knees in some ways.

2. Education: Too many know too little; salespeople on low salaries with long hours and poor benefits are unmotivated to learn. This undermines public confidence and embeds a distrust of jewelers. The media stays after this with seasonal stories of misrepresentation.

Thoughts: Absolutely agree on all counts. I think this should be number one.

1. Mystique: Can diamonds maintain their mystique if prices put them out of reach for more people? Perceived value is taking hits. Are we entering a post-luxury age of luxury burn-out, faux branding and sated consumers?

Thoughts: Ties into almost all the above.John

 

[John P]

Date: 6/4/2008 8:45:40 PM
Author: purrfectpear

The whole global market thing makes sense to me. I've been making quite a bit by investing in internal index funds.
So according to the charts there, those with larger stones might actually be able to sell them for more than they paid for them by 2010? Looks like there might be more private sales and less trade ins

It depends on who you believe.

Rapaport tried to jump-start diamonds futures last September (story). It did not generate the interest they hoped for.

For non-trade enthusiasts, selling a diamond when you're outside the business has always been a tough prospect.
Here is a past thread with discussion.

It is hard to make blanket statements since investment speculation on a 0.75ct G SI1 IGI marquise will project out differently than a 5ct D IF AGS0 round. Demand is what it is and, as you noted, the big stone market probably won't decline soon. Yeah, I feel pretty safe saying that if you have a clean 10ct stone in a GIA collection color that's been sitting around in a drawer for a decade or so you'll make some money moving it...even if the closest people you know in the trade happen to be...us.

 

[John P]

Date: 6/4/2008 10:19:40 PM
Author: LtlFirecracker
Very interesting. It puts diamonds in context with everything elce that is happening with the global economy. I have a question. Might be a dumb one but I will ask. When I told my boyfriend (who has an MBA) that metal prices were going up he replied, 'well that makes since.' When I asked him why he said because we are heading towards a recession and that when that happens people invest less in stocks and more in durable goods like gold, or platinum, because they are items that will not go away, unlike stocks that can fall in harder times (esp if a company goes bankrupt). Do you think that this is true and that this is playing a role? Or is it more of global competition for the same goods that you talked about above that is playing the major roll in price increases? Or both?

It's both. Your boyfriend is correct that people are investing less in some stocks, but some of them may simply be investing elsewhere. The US market isn't the only player. Since 2007 the Shanghai Stock Exchange is up 87% (!) Bombay's SENSEX is up 27% and the Euro is up 17%. Where do you think a big chunk of that money is coming from? You got it. US (the initials and the word). As a YDD it makes me cringe every time I see the commercial where the guy is excited about buying on the SSE from his living room in America. There is also global competition for the goods you mention, and our falling dollar in the face of other economies on-the-rise makes the cost-difference greater for us as they improve.

 

[John P]

Date: 6/5/2008 7:55:44 AM
Author: Rob UK
Thank you John for this contribution. As I was unable to attend this speech, your summary helps me to get a clear view of what was discussed.

Hey Rob. It''s great to see you posting. I enjoyed spending time with you at JCK and look forward to hearing your points-of-view here. Just don''t beat us up too much with your brawny Euro right now, ok?

 

[John P]

Date: 6/5/2008 11:47:05 AM
Author: niceice

Date: 6/4/2008 1:30:54 PM
Author: John Pollard

Not all Gloom and Doom
After all, following inflation in the 1980s it was the little guy that kept things going. He maintains that free, fair, efficient and competitive markets are the only way forward.

Consumers are not becoming less educated.

These are two concepts that I believe are factors which will define the future of the online diamond business... While some of the larger publicly traded companies seem to offer a larger selection of diamonds that they have never seen (with RARE exception) the fact is that they lack the ability to provide their clients with any semblance of actual customer service beyond the scope of pushing the electronic paper trail through the order fulfillment process. The more that consumers become more educated the more information they want and the less effective larger companies seem able to meet the desires of their customers. ''The little guy'' can adapt his operation to meet the ever changing demands of his/her customers from moment to moment to cater to the needs of a broader client base while the corporate conglomerates have to consider what effect each change will have upon their stock price and the mind of their stockholders.

I agree completely. We''ve seen this time and again. Small, fast-acting companies are often best in-touch with the ever-evolving wants and needs of clientele. A few large companies have used web 2.0 and similar, effective feedback vehicles to become more nimble (Southwest Airlines comes to mind) but most still make policy decisions at a glacial pace and speak to consumers in the standard corporate-monotone. As today''s 15-25 year olds become the movers and shakers of the next few decades I''m afraid that won''t cut it... When was the last time you knew a teenager to patiently wait a day or two for the reply to a text?

 

[John P]

Date: 6/5/2008 6:27:24 PM
Author: AndyMN

Excellent reporting John, I feel like I was in Vegas at the presentation. I''m new to the site as well and look forward to future correspondence. I love this;

This is a difficult topic because the Rapaport list is supposed to reflect global pricing trends, yet many also react to it and use it to set their prices. There were comments disputing the reality of the adjustment and questions: Is demand actually driving pricing that required this adjustment, or did Rapaport’s adjustment prior to the show create those increases itself? Some audience members believe Rapaport was not being responsible by making such a dramatic adjustment with no warning right before JCK.
Mr. Rapaport responded that his list is, and always has been, a guide. While based on intensive data gathering it is, ultimately, speculative. He believes in the list and he urged people - if they don’t believe such pricing is real - not to buy at those prices. When your supplier sees the back of your head as the answer to his pricing he’ll ask you to wait and work with you. If not, it means he is able to get those prices, in which case the adjustment was correct to begin with.

What a great answer by Rappaport! The next couple of years after the election are going to be very interesting.

Andy - Thanks and welcome to Pricescope.

Yep. Pricing is the chicken. Rap is the egg.

Which came first?

I did get the answer to one (ancient?) question: If men in suits start yelling and no-one can solve it do they still make a sound? Yes.

 

[Garry H (Cut Nut)]

Date: 6/6/2008 5:34:26 PM
Author: John Pollard

Date: 6/5/2008 6:27:24 PM
Author: AndyMN


Excellent reporting John, I feel like I was in Vegas at the presentation. I''m new to the site as well and look forward to future correspondence. I love this;

This is a difficult topic because the Rapaport list is supposed to reflect global pricing trends, yet many also react to it and use it to set their prices. There were comments disputing the reality of the adjustment and questions: Is demand actually driving pricing that required this adjustment, or did Rapaport’s adjustment prior to the show create those increases itself? Some audience members believe Rapaport was not being responsible by making such a dramatic adjustment with no warning right before JCK.
Mr. Rapaport responded that his list is, and always has been, a guide. While based on intensive data gathering it is, ultimately, speculative. He believes in the list and he urged people - if they don’t believe such pricing is real - not to buy at those prices. When your supplier sees the back of your head as the answer to his pricing he’ll ask you to wait and work with you. If not, it means he is able to get those prices, in which case the adjustment was correct to begin with.

What a great answer by Rappaport! The next couple of years after the election are going to be very interesting.

Andy - Thanks and welcome to Pricescope.

Yep. Pricing is the chicken. Rap is the egg.

Which came first?

I did get the answer to one (ancient?) question: If men in suits start yelling and no-one can solve it do they still make a sound? Yes.

I have no doubt that Martin is genuine in his attempts to run the list properly.

But it might just have become bigger than the man, and that is saying something.

He dammed if he do

He dammed if he don''t

 

[Futuremrss]

Someone was sneaking some pictures, OKAY! YOU GO! All I know is scap it down and buy some more!

 

[diagem]

Date: 6/7/2008 11:33:41 PM
Author: Garry H (Cut Nut)

Date: 6/6/2008 5:34:26 PM
Author: John Pollard

Date: 6/5/2008 6:27:24 PM
Author: AndyMN



Excellent reporting John, I feel like I was in Vegas at the presentation. I''m new to the site as well and look forward to future correspondence. I love this;

This is a difficult topic because the Rapaport list is supposed to reflect global pricing trends, yet many also react to it and use it to set their prices. There were comments disputing the reality of the adjustment and questions: Is demand actually driving pricing that required this adjustment, or did Rapaport’s adjustment prior to the show create those increases itself? Some audience members believe Rapaport was not being responsible by making such a dramatic adjustment with no warning right before JCK.
Mr. Rapaport responded that his list is, and always has been, a guide. While based on intensive data gathering it is, ultimately, speculative. He believes in the list and he urged people - if they don’t believe such pricing is real - not to buy at those prices. When your supplier sees the back of your head as the answer to his pricing he’ll ask you to wait and work with you. If not, it means he is able to get those prices, in which case the adjustment was correct to begin with.

What a great answer by Rappaport! The next couple of years after the election are going to be very interesting.

Andy - Thanks and welcome to Pricescope.

Yep. Pricing is the chicken. Rap is the egg.

Which came first?

I did get the answer to one (ancient?) question: If men in suits start yelling and no-one can solve it do they still make a sound? Yes.

I have no doubt that Martin is genuine in his attempts to run the list properly.

But it might just have become bigger than the man, and that is saying something.

He dammed if he do

He dammed if he don''t

"...and that is saying something."

It sure is!!! A lot!

Last month I heard his "State of the Diamond....., speech" and I think I felt that he himself was admitting that this has become bigger than him and some...!
Especially after his "Dramatic External Forces" report

John''s review is well written and shows the points! But to listen to Rapaport is a "show" (usually even a comedy...).., and when he talked about the external forces which are influencing our market.., he was pretty dramatic!

But quickly decided to relax the drama right after when he spoke of the internal forces.


Perhaps signs of maturity??? Maybe the Diamond industry had chosen (or has no choice but) to start moving away from its past primitiveness and join the modern Ocean of economics??

As long as there was a monopoly/syndicate (DeBeers) that was controlling the flow and prices in the market..., it was possible for Rapaport to produce a "guide".

 

[John P]

Date: 6/8/2008 8:37:07 AM
Author: DiaGem

''...and that is saying something.''

It sure is!!! A lot!

Last month I heard his ''State of the Diamond....., speech'' and I think I felt that he himself was admitting that this has become bigger than him and some...!
Especially after his ''Dramatic External Forces'' report

John''s review is well written and shows the points! But to listen to Rapaport is a ''show'' (usually even a comedy...).., and when he talked about the external forces which are influencing our market.., he was pretty dramatic!

But quickly decided to relax the drama right after when he spoke of the internal forces.


Perhaps signs of maturity??? Maybe the Diamond industry had chosen (or has no choice but) to start moving away from its past primitiveness and join the modern Ocean of economics??

As long as there was a monopoly/syndicate (DeBeers) that was controlling the flow and prices in the market..., it was possible for Rapaport to produce a ''guide''.

Thanks DG. You are right about Martin being dramatic. It makes the talks engaging and you probably know as well as I do that many people in this industry need jump-starting or some kind of wake-up call (catching up with the internet & promoting education for "jewelry professionals" springs immediately to my teacher''s-mind).

Now that DeBeers is moving inevitably towards demand-influence rather than supply-influence, do you think it''s possible they are using their last chits to up the upstream pricing while they can?

You may find this interesting... I think we already have an all-access US pricing guide apart from Rap. It''s called Blue Nile. Another is Pricescope. That''s what the consumers here are using as a reality check. So are worthy appraisers, who calculate "internet price," commercial retail price and perhaps a high-end retail price - all based on BN/PS comparables.

 

[diagem]

Date: 6/8/2008 6:51:29 PM
Author: John Pollard

Date: 6/8/2008 8:37:07 AM
Author: DiaGem

''...and that is saying something.''

It sure is!!! A lot!

Last month I heard his ''State of the Diamond....., speech'' and I think I felt that he himself was admitting that this has become bigger than him and some...!
Especially after his ''Dramatic External Forces'' report

John''s review is well written and shows the points! But to listen to Rapaport is a ''show'' (usually even a comedy...).., and when he talked about the external forces which are influencing our market.., he was pretty dramatic!

But quickly decided to relax the drama right after when he spoke of the internal forces.


Perhaps signs of maturity??? Maybe the Diamond industry had chosen (or has no choice but) to start moving away from its past primitiveness and join the modern Ocean of economics??

As long as there was a monopoly/syndicate (DeBeers) that was controlling the flow and prices in the market..., it was possible for Rapaport to produce a ''guide''.

Thanks DG. You are right about Martin being dramatic. It makes the talks engaging and you probably know as well as I do that many people in this industry need jump-starting or some kind of wake-up call (catching up with the internet & promoting education for ''jewelry professionals'' springs immediately to my teacher''s-mind).

Now that DeBeers is moving inevitably towards demand-influence rather than supply-influence, do you think it''s possible they are using their last chits to up the upstream pricing while they can?

You may find this interesting... I think we already have an all-access US pricing guide apart from Rap. It''s called Blue Nile. Another is Pricescope. That''s what the consumers here are using as a reality check. So are worthy appraisers, who calculate ''internet price,'' commercial retail price and perhaps a high-end retail price - all based on BN/PS comparables.

John..., just as you mentioned that: ''...I think we already have an all-access US pricing guide apart from Rap. It''s called Blue Nile. Another is Pricescope....",

DeBeers and other major rough producers have a new and improved "Worldwide pricing guide" tool the get the information necessary...

Its called "tenders"..., you have been to them..., a great tool for the rough producers who chose not to follow DeBeers (DTC) old pricing system..

No more guess work..., throw some rough at a hungry market and answers would follow...

Some will say it is not the true pricing level..., and I agree..., but if you study DeBeers''s (Diamdel) new tendering system, you will notice a birth of a new and potentially efficient system which will bring the numbers closer to their reality....

 

[John P]

Date: 6/9/2008 1:44:53 AM
Author: DiaGem

John..., just as you mentioned that: '...I think we already have an all-access US pricing guide apart from Rap. It's called Blue Nile. Another is Pricescope....',

DeBeers and other major rough producers have a new and improved 'Worldwide pricing guide' tool the get the information necessary...

Its called 'tenders'..., you have been to them..., a great tool for the rough producers who chose not to follow DeBeers (DTC) old pricing system..

No more guess work..., throw some rough at a hungry market and answers would follow...

Some will say it is not the true pricing level..., and I agree..., but if you study DeBeers's (Diamdel) new tendering system, you will notice a birth of a new and potentially efficient system which will bring the numbers closer to their reality....

In a world of tenders and auctions do you think the big players would try and price the others out of the game? (I know the largest players also carry the largest debt so this may not be practical). Still, if that were to happen, wouldn't the de facto result be the return to a limited collection of buyers with financial power; sightholders for all practical purposes?