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widget

Ideal_Rock
Joined
Nov 12, 2004
Messages
4,255
Oh great. Just what I needed: another rationale for this sick obsession!


widget
 

Linda W

Super_Ideal_Rock
Joined
Feb 15, 2006
Messages
10,630
Well this should be very interesting. Just what I need too.


Linda
 

RockDoc

Ideal_Rock
Joined
Aug 15, 2000
Messages
2,509
I watched the video clip, and while the prices are going to increase in all probability, he certainly doesn''t address how to sell the investment once you invested your money.

He mentions a 30-40% increase over 5 years.. at best that is an 8 % increase per year. Additionally he''s talking about buying 5 carat stones and larger? Not in the area that most can afford to tie up for 5 years, and that is not considering any fees you''d be subject to paying to liquidate the stones in 5 years.

Maybe a good investment if you''re in the business, and can sell them when the time is right. But even if you are in the business, one needs to consider "turn of inventory". How many people are in the market in the future that want to buy 5 carat plus fine quality diamonds?

Are you better owning a lot of 1 carat stones that consistently sell, or one stone that only 1-2% of the buying public would or could buy?

On the surface, I''d say his advice is not so good.

Seems like he''s preaching to the " I have more money than brains crowd".

Rockdoc
 

Wink

Ideal_Rock
Trade
Joined
May 3, 2001
Messages
7,472
I tell my clients that they need the diamond market to basically double for them to break even. That is a little high, but if I buy from a supplier for X and sell it for X + Y, even if Y is very small and it will be, there needs to be good movement for my client to be able to sell it at a gain.

For one thing, on the turn the dealer who sold at X is going to be offering X - Z to buy and I will also be wanting another small commission for selling. Also, when you bring in the stone valued at let''s say 250,000, I am not going to just write you a check for the stone, but rather sell it for you, which could take months.

As much as I enjoy a good "discussion/argument" with Roc, I think he nailed it pretty good here. It is not an investment for the average investor and only a savy high ticket investor should pay any attention to this particular investment guru''s advice.

Wink
 

JohnQuixote

Ideal_Rock
Joined
Sep 9, 2004
Messages
5,212
($ Ditto, Rock and Wink)

On-point for the community; CONGRATS to Leonid, Irina and PS for the reference.

We who participate here recognize what a valuable resource the forum is. Always nice when it's verified from the outside.
 

Wink

Ideal_Rock
Trade
Joined
May 3, 2001
Messages
7,472
Well said John! I further discounted this guy''s advice when he said to go to BlueNile... They have a nice site but to paraphrase a certain gentleman running for VP a few years ago, "I know Pricescope Mr Nile, and believe me, you are no Pricescope!"

(For non political Junkies, Dan Quale stated when challenged about being too young to run for VP that he was as old as Kennedy was when he was elected and his oponent stated, "I knew Mr. Kennedy sir, and believe me, you are no John Kennedy.")

Wink
 

peachster

Rough_Rock
Joined
Jan 9, 2007
Messages
37
As a consumer, diamonds are a terrible investment, at least the commercial diamonds. If I buy a 1.5 ct. round diamond and try to sell it, I would be lucky to get 50% of my purchase price. It is disheartening, because a used diamond, with no chips or damage would be the same as the diamond I bought new. And if a dealer purchased it from me, they could easily drop it into a setting, and it would be "new" again. I love my sparkly stones, but an investmet they surely are not.
 

aljdewey

Ideal_Rock
Joined
Nov 25, 2002
Messages
9,144
HAHHAHAHAHAAAAAAAAAAAA

My husband will be HORRIFIED to hear that I have an *outside neutral source* suggesting that my desire to buy diamonds now is a good idea!
 

Maisie

Super_Ideal_Rock
Joined
Dec 30, 2006
Messages
12,578
I am sure Blue Nile is great but PS is of course the bestest!!!!
 

Kaleigh

Super_Ideal_Rock
Joined
Nov 18, 2004
Messages
29,570
Kudos to PS for getting the mention, will be watching tomorrow!!
 

Regular Guy

Ideal_Rock
Joined
Jul 6, 2004
Messages
5,951
Date: 3/17/2007 8:38:02 PM
Author: Kaleigh
Kudos to PS for getting the mention, will be watching tomorrow!!
Kudos to Pricescope, absolutely. Though you can''t exactly say great minds think alike!
 

Beacon

Ideal_Rock
Joined
Jul 14, 2006
Messages
2,037
Date: 3/17/2007 2:15:40 PM
Author: RockDoc
I watched the video clip, and while the prices are going to increase in all probability, he certainly doesn't address how to sell the investment once you invested your money.

He mentions a 30-40% increase over 5 years.. at best that is an 8 % increase per year. Additionally he's talking about buying 5 carat stones and larger? Not in the area that most can afford to tie up for 5 years, and that is not considering any fees you'd be subject to paying to liquidate the stones in 5 years.

Maybe a good investment if you're in the business, and can sell them when the time is right. But even if you are in the business, one needs to consider 'turn of inventory'. How many people are in the market in the future that want to buy 5 carat plus fine quality diamonds?

Are you better owning a lot of 1 carat stones that consistently sell, or one stone that only 1-2% of the buying public would or could buy?

On the surface, I'd say his advice is not so good.

Seems like he's preaching to the ' I have more money than brains crowd'.

Rockdoc
A 40% return over 5 years equals a 7% compounded annual rate of return. Considering the opportunity cost of your capital, which can easily earn 5% compounded risk free w/ full liquidity, this is not an investment - you'll lose money in selling costs and buy-sell spread.

But I love the idea of it - what a fun excuse to buy a 4-5 carater! Investment - no, pleasure - yes!

At least they are recommending steps for the consumer to protect themselves in purchase, like PS. That is very good.

I think that like anything, the rarer and finer things tend to appreciate the best, so buying a large high quality stone will certainly be the wisest thing - as long as you know what is and what is not an "investment".
 

RockDoc

Ideal_Rock
Joined
Aug 15, 2000
Messages
2,509
It''s nice that he inked in Pricescope, but I don''t know how deeply he''s read it, or he wouldn''t be hyping up diamonds as an investment.

There are a few that would like to see diamonds be a commodity, and traded as such, but don''t really know how good that would be for consumers, due to the uniqueness of stones.

I just ponder though how accurate his predicted appreciation of 30-40% in 5 years is. If the market does get starved for 5 carat plus size diamonds, in fine quality, that estimate just MIGHT be very LOW.

Will be interesting to hear about the full program, to see if he provides any advice to the cost of selling, and HOW to and the expenses to liquidate them. If he doesn''t, I think it is very irresponsible journalism on his part.

Rockdoc
 

Ann

Brilliant_Rock
Joined
Sep 24, 2004
Messages
1,531
I just watched it and well, hmm, I''m not running out
the door to go buy a diamond. If you buy a nice large stone,
heck, what woman wants to part with it! duh.

Is the PS mention on the web link/video?
I didn''t hear it in the CNBC story.
 

Kaleigh

Super_Ideal_Rock
Joined
Nov 18, 2004
Messages
29,570
Date: 3/18/2007 8:34:02 PM
Author: Ann
I just watched it and well, hmm, I''m not running out
the door to go buy a diamond. If you buy a nice large stone,
heck, what woman wants to part with it! duh.

Is the PS mention on the web link/video?
I didn''t hear it in the CNBC story.
I just watched it too, no mention of PS. Must be in an article?? Diamonds to me are not wise investments, bigger size or not. But the stock that was mentioned that mines diamonds, and has gold and platinum holdings was interesting to me....Now can''t think of the name, began with an A???
 

Beacon

Ideal_Rock
Joined
Jul 14, 2006
Messages
2,037
So I watched the show. Enjoyed the monster sized stones they showed. Not much investment advice here BUT

I have a question, especially for the pros on PS: is there really a "glut" of smaller diamonds on the market right now, as this show stated?
 

bluehue

Shiny_Rock
Joined
Dec 16, 2005
Messages
138
Kudos to PS. As for 5+ct diamonds as an investment, only if they can pry it out of my cold, dead hand!!!!!!!!!
 

strmrdr

Super_Ideal_Rock
Joined
Nov 1, 2003
Messages
23,295
Date: 3/18/2007 8:49:31 PM
Author: Beacon
So I watched the show. Enjoyed the monster sized stones they showed. Not much investment advice here BUT

I have a question, especially for the pros on PS: is there really a ''glut'' of smaller diamonds on the market right now, as this show stated?
sure, there are more diamonds being mined right now than any time in history.
And in spite of the played with numbers I''m betting sales volume is off too and profit margins are going down.
China and India have been picking up the decline in the US market but they wont likely grow fast enough to keep up with the decline in the US market over the next couple years as interest rates rise and housing contracts if not bombs.
 

oldminer

Ideal_Rock
Trade
Joined
Sep 3, 2000
Messages
6,378
Diamond delaers do have confidence in the continuing, and growth value of diamonds. Many huge diamond firms have millions of their own dollars tied up in diamonds and they do feel like they can sleep well at night knowing that diamonds are a universal currency of sorts which cross over all artificial financial barriers.

Diamonds are as likely to up in value as inflation is going to change the price or value of any country''s currency. It is the "relative" difference that is what matters most, not the dollars themselves. If we have high inflation rates, diamonds will likely cost more dollars. Investing in a financial entity which relates well to inflation is a hedge for the very rich, but not a consumer friendly situation. There is no fair and ready market for diamonds when an individual wishes to cash out. There just are better things to invest in which are somewhat as likely to go up relative to inflationary forces.

Its a whole lot better to presume that oil will rise faster than inflation since there will eventually become a shortage along with higher worldwide demand. It is really difficult to wear a petroleum ring, so diamonds can''t be replaced entirely.
 

Paul-Antwerp

Ideal_Rock
Trade
Joined
Sep 2, 2002
Messages
2,852
We all know and many have repeated here that it is unwise for an individual to invest in physical diamonds, and to regard this solely as an investment.

However, what about buying stock of an efficient diamond company, which constantly owns a stock of diamonds, but which is also constantly trading them, so buying and selling? This is very much comparable to buying part of an investment fund in bonds or stock, only the underlying value is now in diamonds.

The trick would probably be to find the most efficient diamond company, because this implies the lowest overhead-expense, and thus the highest return for the investor.
 
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