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.Date: 3/17/2007 2:15:40 PM
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'.
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???Date: 3/18/2007 8:34:02 PM
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.
sure, there are more diamonds being mined right now than any time in history.Date: 3/18/2007 8:49:31 PM
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?