De Beers undercuts the man made diamond price

[TreeScientist]

One market that I would be concerned for, however, is the moissanite producers. They were the rulers of the $500-1000 domain for the last decade or so, but I'm pretty sure that damn-near everyone would prefer a similarly-priced MMD over a moissanite because, as you said, a MMD is indistinguishable to outside observers, while many can tell a moissanite from a diamond.

If I were in the moissanite business, I would be in 5-alarm panic mode right now. Will be interesting to see how they respond to these recent events.

 

[KingKuda]

"We grow up thinking one day we will propose with a MINED diamond and not a moissanite because that is what we see on the TV and on social media."

To an extent and I do appreciate your point, but the general trend is to get as big as you can for as little as you can. Maybe I am generalising but I don't know a single friend who has proposed with a small flawless diamond, literally all of them propose with the biggest possible diamond with the lowest acceptable clarity. Obviously those with more money will go for both, size and clarity, however that is a small percentage.

The average millennial want what they see on TV and social media, we are swarmed by it. Go read the comments on people showing an engagement ring off on Instagram, you will feel sick at what people say about diamonds <1ct in size.

If there was a distinguishable difference to the naked eye between MMD and mined diamonds, anything at all, I agree their price would just plummet. However if there is no distinguishable difference, if nobody can tell, it's a very very dangerous game.

 

[TreeScientist]

To an extent and I do appreciate your point, but the general trend is to get as big as you can for as little as you can. Maybe I am generalising but I don't know a single friend who has proposed with a small flawless diamond, literally all of them propose with the biggest possible diamond with the lowest acceptable clarity. Obviously those with more money will go for both, size and clarity, however that is a small percentage.

The average millennial want what they see on TV and social media, we are swarmed by it. Go read the comments on people showing an engagement ring off on Instagram, you will feel sick at what people say about diamonds <1ct in size.

If there was a distinguishable difference to the naked eye between MMD and mined diamonds, anything at all, I agree their price would just plummet. However if there is no distinguishable difference, if nobody can tell, it's a very very dangerous game.

I have seen this as well. But not everyone wants a 3 carat honker. My girlfriend is a doctor, and she specifically wanted to stay in the <1 carat range because anything in the 1.5-2 carat range would make it difficult to put on nitrile gloves.

Still, what the eye observes in only part of the equation. Humans "see" much more with their thoughts than with the signals received from their optical nerves. The feeling of owning a REAL, NATURAL diamond, and being able to tell others that it is a natural diamond without lying, is something that I'm sure will still be worth a lot to many consumers. But I do see the questions from snooty, nosy (and perhaps jealous) friends switching from:

"Is it a real diamond" to

"Is it a natural diamond"

in this low-cost MMD future.

 

[TreeScientist]

God damn, take a look at their new storefront for the MMDs, which will be known as Lightbox. Pay particular heed to their explanation for the pricing.
https://lightboxjewelry.com/pages/our-pricing

Read through all of their pages describing the pricing and where the jewelry fits into the market. It's exactly as the press releases are describing: DeBeers is essentially downplaying MMDs as mere "playthings." From the pricing page:

"Nature created diamonds over a billion years ago. The larger a natural diamond, the rarer it becomes. Each one is unique, like a snowflake. So they are priced individually, often with certificates to describe their character and qualities.

But we can make laboratory-grown diamonds every day of the week (). Among the finest you can find. In the color or size we choose. So our pricing is easy, as transparent as our stones."

Pure.

Marketing.

Genius.

 

[KingKuda]

I'm very confident that this isn't simply a marketing ploy where they hope just by down playing MMDs they can crush their value.

It would be the first step in a very calculated, well planned defence.

 

[TreeScientist]

I'm very confident that this isn't simply a marketing ploy where they hope just by down playing MMDs they can crush their value.

It would be the first step in a very calculated, well planned defence.

Actually, I think that is exactly what is going on, i.e., crushing their value. But I wouldn't describe it as a "simple" marketing ploy. That in itself is a very calculated move. What they're essentially saying is:

"Anyone can make MMDs. Look, we can do it too. And much cheaper than you can because of our scale.

But only nature can make natural diamonds. And guess what, we control the mines. Good luck to you, other gem-grade MMD producers."

 

[TreeScientist]

As also mentioned in this thread, MMDs are going to be essential in many applications beyond jewelry, as DeBeers MMD parent company, which has been working with them for close to 50 years, already knows. But they're essentially worthless in jewelry beyond their cost of manufacture due to the whole "Anyone can make them" point. By doing this now, DeBeers will have a new corner on the MMD for jewelry market (and can probably turn a small profit on them as well, although, as already mentioned by @John Pollard, there's much more money to be made in MMDs outside of jewelry) as well as maintaining the "supremacy" of mined diamonds due to the pricing structure.

I honestly don't see MMDs suddenly jumping back up in price once DeBeers corners the market. As already mentioned, if they raise the prices back up to where others could be competitive and undercut them, then other producers would jump right back into the game. They'll take what they can get from the low-cost MMD jewelry market and try to hold their position in the "exclusivity" of mined diamond jewelry.

 

[OoohShiny]

Some great discussions here, people

DeBeers hasn't been a dominant force for 60+ years by chance, so I think they are playing the game well with this move. They are actively trying to sabotage their opponents' market while entering it to reap benefits from it at the same time, all the while increasing the strength of their 'natural is best' message.


Is it a risky game, as already proposed in this thread? I personally think it is, as price is a strong driver for many (most) people who aren't 'the 1 percenters'.

If one can purchase a 1ct D IF Type IIa MMD for the same price as, what, a 0.35ct G-H VS2 GIA XXX Mined diamond (or whatever the estimated $800 buys you nowadays), and you have a family to feed, an older car or two to maintain, healthcare insurance to pay for and two jobs to work to keep a roof over your family's head, but you still want to buy your wife the biggest, sparkliest, most good-looking ring or other piece of jewellery you can afford (that isn't CZ or other simulants that one can buy in a 'fashion ring' at the local mall for $20, because they generally look really not that good and not many people know about PS and the options discussed on here), why would you spend $$$$s on a lower-spec 1ct Mined stone when the MMD option would look amazing, look absolutely identical on the finger to everyone, and be something that is realistically within your limited budget?

Plus, if DeBeers are also cutting the rough they are producing, and (one would hope) cutting to an Excellent/Ideal standard (rather than deliberately attempting to sabotage/reduce their desirability by poor cutting), one could buy an MMD knowing that one is getting the best cut and therefore performance available - which is the opposite of many people's experience of the jewellery business, where one usually walks into a local jewellers, is presented with a selection of (mined) diamonds, and has no idea how good they are or if they are overpriced or not.

If DeBeers is offering complete clarity of MMD pricing and, perhaps, selling direct to consumers (and why not, if they are only worth <$1k for even a whole carat and loss/theft during shipping is a lot less of a risk) then the business model could be completely different and perhaps even discourage purchase of Mined diamonds due to the opacity of that market to general consumers.


I can only hope that the availability of rough at what must be well under $800/ct (presuming the quoted price includes labour to cut it and then distribution costs) will lead to cutters having the opportunity to experiment more with the material, which could lead to more innovative and exciting cuts coming forward.

This could then be a whole new market in itself - in the same way that a Picasso or a Monet is made up of just some cheap coloured paint and some canvas, the MMD base material may now be cheap but the skill of the artist/cutter would be what justifies a higher price of beautiful finished product. Cutting could become more of an artisan skill rather than just focusing on 'cookie cutter' production of MRBs.

Then, if some snob sneers down at you to ask "Oh, is it natural diamond or one of those cheap MMDs?" one could respond with "It's a custom-cut MMD by [insert name of exclusive, highly skilled cutter here] - do you only buy standardised cuts?"

Personally I hope this does happen, as I for one would LOVE to be able to afford a 2ct Yoram asscher or Octavia in colourless, VVS+ material as well as some french cut or peruzzi cut eternity rings for the other half! I guess only @diagem can confirm if he would/will cut MMDs - I hope he does, as I would be happy to pay the same going rate for his time but pay less for the (identical ) base material. And @Rhino could do even more research and development!

 

[TreeScientist]

Personally I hope this does happen, as I for one would LOVE to be able to afford a 2ct Yoram asscher or Octavia in colourless, VVS+ material as well as some french cut or peruzzi cut eternity rings for the other half! I guess only @diagem can confirm if he would/will cut MMDs - I hope he does, as I would be happy to pay the same going rate for his time but pay less for the (identical ) base material. And @Rhino could do even more research and development!

Sign me up for the 2 ct Yoram Octavia MMD pre-order list. Would love to put one in a Pendant for my girlfriend.

 

[Johnbt]

"absolutely nobody in the street without a bag of tools can tell the difference between a mined diamond and a MMD."

When my pizza is delivered to my front door by a 19-year-old college student wearing a 3 carat stone, I'll be guessing it's a MMD.

Same deal with a 21-year-old Uber driver showing up in a KIA.

For some reason this discussion reminded me of the old ad campaign from the '70s featuring Ella Fitzgerald. (They recorded her shattering a glass with her voice and then used the recording to shatter a glass.)



For $200 per .25 carat I might just glue a few into my favorite fishing reel handles just to mess with my buddies. How about some diamond-studded canoe paddles? The possibilities are endless.

 

[Johnbt]

"...take a look at their new storefront for the MMDs, which will be known as Lightbox. Pay particular heed to their explanation for the pricing."

Fantastic, thank you for the link.

I think they should add a quote from Mad Man Dapper Dan, a fondly remembered used car dealer here in Richmond VA in the '60s and '70s.

"I'd give 'em away but my wife won't let me."

(He was successful enough with it over the years. His house was a copper-clad, crescent shaped, architecturally beautiful, modernist vision. It even had movable interior walls and had a beautiful view of the James River.)

 

[TreeScientist]

This is also completely wrong. A fake looks like a fake when held next to the real thing. It is distinguishable to the naked eye, isn't as sturdy and leaves you open to embarrassment when you tell the person next to you it is real, only to then find out they own the real version and can see all of its flaws. I've owned expensive fakes myself and never pass them off as real because I've seen far too many people lie and look like a fool. What we have here though is literally the exact same product that is indistinguishable. I know I keep going on about it, but absolutely nobody in the street without a bag of tools can tell the difference between a mined diamond and a MMD. They can pick it up and put it next to their own and still won't be able to call you out, that is the difference.

A better way of putting it is a ring from Tiffany's. They are beautiful, exclusive, pricey and every girl would love one. However because of the premium you have to pay to get one, people instead go out, copy the design and get it made for 50% of the cost of a Tiffany's ring. The younger generations today want whatever is trending on Social Media, that is the reality. You will struggle to find a young girl who asks for a 0.5ct mined diamond if for the same price, she can get herself a 2.5ct MMD that looks identical to the diamond being worn by her favourite celebrity.

As for the fakes not looking like the real thing, I would highly disagree with this as well. You obviously haven't been to Vietnam. Like I said, it is the kingdom of perfect replicas (and nail salons***). For the $10 fake example that I provided, yes, the discerning consumer may be able to tell them apart. But the slightly more expensive fakes? Not a chance. Seriously, go there and find one of the higher end fake LV bags. They'll run you $30-40 (depending on the detail of the bag), and they're pretty much an exact replica. Down to the very. last. stitch. In all seriousness, I think they're actually real bags that are dumped on the grey market and sold as "fakes" just to clear excess stock. Either that, or the replica producers have this down to an exact science. If there is a difference, I would need a microscope to differentiate it, and I am a fairly discerning consumer in these matters having seen both real versions (from friends in America) and excellent fakes (from friends in Vietnam).

Same goes for watches, which is more my forte. One of my friends has this watch (I believe it is this one, I can't remember exactly, but I know he said it was a high-priced fake):
https://bestreplica.sr/product/rolex-submariner-date-ss-black-ceramic-bezel/

I've seen a few real Subs in my time, and this is seriously as close as you're going to get. The movement is perfectly replicated, down to the very last piece. They even perfected the little hologram "Rolex" that is printed around the interior of the bezel. They have threads on watch forums of people taking these into ADs and having the ADs believe it's genuine. Yeah, it's still expensive for a replica at about $1000 after the discount, but beats the hell out of $10k for the real version. And this isn't the only company doing it. There are a few high end "Folex" producers that are really nailing it to an exacting degree.

All this to say that, in the world of fine goods, there's people out there in every case that are able to replicate the real thing to an exacting degree... But yet people will still pay for the real thing.

..Yeah, humans are illogical, but that's what makes us entertaining, isn't it?

So yeah, I don't think MMDs that cost 10% of mined diamonds will hurt the mined diamond industry too much. Perhaps a little, but there will still be a market for them, particularly for engagement rings where the whole "diamond is forever" mentality is really engrained. But I can definitely see low-cost MMDs infiltrating the market for studs/tennis bracelets/pendants/etc., where there isn't so much of the emotional undertones as for E-rings and people are mainly just looking for a sparkly status symbol that can pass for real.

***I'm allowed to make this joke because my girlfriend is Vietnamese.

 

[glitterata]

I was interested to see on their website that they're planning to sell necklaces and earrings, but no rings, and that they're setting them only in silver or 10K gold. Nothing bigger than 1ct, and no rings. They're positioning them as costume jewelry, very distinct from precious engagement jewelry. Of course, there would be nothing stopping you from buying (say) a 1 ct pendant in the cheapest silver setting and having it reset in a ring, but I think they're hoping people won't think of that or won't know how to do it--and maybe jewelers will cooperate in making it difficult. I very much doubt they'll be selling the MMDs loose, and it's interesting that they're not going above 1ct, at least not now.

 

[Gussie]

Did yall look at the preview? https://lightboxjewelry.com/collections/jewelry-preview

Sterling, gold plated, 10k gold. No rings, only pendants and earrings, maximum 1ct. I wonder if they will expand to higher quality metals and larger diamonds. I believe they are pushing this as high end costume jewelry, which IMO is exactly what it is.

ETA @glitterata Just saw the your post! Seems I am not the only one with these thoughts!

 

[Tourmaline]

This is utterly brilliant of them.

 

[OoohShiny]

"absolutely nobody in the street without a bag of tools can tell the difference between a mined diamond and a MMD."

When my pizza is delivered to my front door by a 19-year-old college student wearing a 3 carat stone, I'll be guessing it's a MMD.

Same deal with a 21-year-old Uber driver showing up in a KIA.

I would propose that what a 'fake' item I am wearing says to you says more about you than it does about me

Marketing is all about creating and securing a cachet, an image, a set of values attached to a product - people feel cheated by 'fakes' because they attach 'brand values' to the wearer and then feel 'let down' or 'cheated' when said wearer does not accord with those values.

A relevant example could be Patek, with their advertising that attempts to sell their products as being heirlooms for your good-looking children that will inherit your wealth and lifestyle that you have built up through your hard work as a fund manager etc. etc. (hence adverts depicting yachts and 'the beautiful people' etc.).

The fact is, of course, that a homeless person could spend $1 in dimes they've collected off the street on a lottery ticket and then go on to win $1m, then walk straight into a Patek store in their unwashed clothes and 2-years-of-beard-growth to lay down 30-large on a stainless steel(!) watch.

What would the casual observer think when they saw said person straight after they walked out of the store? That the watch was a 'fake'? That they'd robbed someone or the shop itself? That they should be reported to the police?

The fact is that plenty of people with substantial wealth buy fake goods. If you're stepping out of a $100k Porsche, who is going to question the watch on your wrist, the leather wallet in your pocket or the bag your wife is carrying?

If you're financially astute, why would you spend $10k on a single item when you could buy something replicating it almost exactly for $500?

People 'buy' the overall image of a person rather than any one single item, as per the example of the pizza boy. This is why so many people are obsessed with owning the latest car, the latest phone, the latest technological gadget - to do so suggest to others that 'you've made it' and are in the financial position to afford it.

The reality is, as we all know, that people are drowning in unsecured personal debt to keep up this facade. One couldn't possibly be seen to be unable to afford shiny new things, could one? One wouldn't want to be judged by others for not earning six-figures a year, would one?

The sooner people just accept other people for who they are inside and the quality of their actions within the world, rather than judging them by the goods they own or the way they look, the better, IMHO.

It is interesting to note that many very wealthy people deliberately choose to dress down, drive old cars, live in small houses, keep their wealth under wraps, because they don't want to be judged on their possessions or appearance in the abovementioned manner. By doing so they are trying to ensure that the people they do interact with judge them on their character instead of anything else., which I think is an excellent idea (although one really should be able to wear and buy whatever one wants without being judged for it...).


Anyway, I fear I am off topic


I look forward to being able to source 5ct rough for $4000, which can be cut into 2ct+ stepcuts! If people think I am a fraud and judge me for it, I won't particularly care - I'll be too busy staring at the light display from the massive rock on my finger

 

[TreeScientist]

I would propose that what a 'fake' item I am wearing says to you says more about you than it does about me

Marketing is all about creating and securing a cachet, an image, a set of values attached to a product - people feel cheated by 'fakes' because they attach 'brand values' to the wearer and then feel 'let down' or 'cheated' when said wearer does not accord with those values.

A relevant example could be Patek, with their advertising that attempts to sell their products as being heirlooms for your good-looking children that will inherit your wealth and lifestyle that you have built up through your hard work as a fund manager etc. etc. (hence adverts depicting yachts and 'the beautiful people' etc.).

The fact is, of course, that a homeless person could spend $1 in dimes they've collected off the street on a lottery ticket and then go on to win $1m, then walk straight into a Patek store in their unwashed clothes and 2-years-of-beard-growth to lay down 30-large on a stainless steel(!) watch.

What would the casual observer think when they saw said person straight after they walked out of the store? That the watch was a 'fake'? That they'd robbed someone or the shop itself? That they should be reported to the police?

The fact is that plenty of people with substantial wealth buy fake goods. If you're stepping out of a $100k Porsche, who is going to question the watch on your wrist, the leather wallet in your pocket or the bag your wife is carrying?

If you're financially astute, why would you spend $10k on a single item when you could buy something replicating it almost exactly for $500?

People 'buy' the overall image of a person rather than any one single item, as per the example of the pizza boy. This is why so many people are obsessed with owning the latest car, the latest phone, the latest technological gadget - to do so suggest to others that 'you've made it' and are in the financial position to afford it.

The reality is, as we all know, that people are drowning in unsecured personal debt to keep up this facade. One couldn't possibly be seen to be unable to afford shiny new things, could one? One wouldn't want to be judged by others for not earning six-figures a year, would one?

The sooner people just accept other people for who they are inside and the quality of their actions within the world, rather than judging them by the goods they own or the way they look, the better, IMHO.

It is interesting to note that many very wealthy people deliberately choose to dress down, drive old cars, live in small houses, keep their wealth under wraps, because they don't want to be judged on their possessions or appearance in the abovementioned manner. By doing so they are trying to ensure that the people they do interact with judge them on their character instead of anything else., which I think is an excellent idea (although one really should be able to wear and buy whatever one wants without being judged for it...).


Anyway, I fear I am off topic

Perfect post @OoohShiny. My friend with the fake Rolex is not someone you would pin as wearing a fake. He's doing very well for himself, but doesn't see the need to buy the real thing (he has other expensive hobbies though ). I guarantee if you saw him wearing it you would never think "FAKE" just based on his outward appearance, his social standing, and the way he carries himself. Funny thing is, his dad (a very wealthy businessman) has a real Submariner.

People don't get rich by accident. The smart ones decide what is important for them to spend money on in life and try to save as much as possible on the rest. Which is why I think these MMDs will probably be bought more-so by the well-to-do class, as they're usually the ones who don't feel like they have something to prove. Many may still own a real diamond or two for emotional reasons, but the low-cost perfect replicas would likely make up the rest.

 

[twang07]

Honestly, I would have jumped on the MMD bandwagon if it was at this price point. At the current price point it was difficult to assess the MMD value when slight deviations to the 4Cs has huge implications for price. I wasn't very well discerning to be confident that I was getting what I was paying for without the gold standard of the GIA or AGS.

At this price point, I would happily jump ALL OVER THIS, regardless of what the 4Cs are, this is a no-brainer value proposal! The comparison to a fake LV is nowhere near the same, you can visually tell it's not LV and doesn't hold up quite the same. The comparison of Tiffany's to knock off tiffany's I think is more appropriate here.

There are so many diamond pieces I absolutely lust over with no ability to afford them in the next 10-15, or even my entire lifetime. I'm not even talking about engagement rings at this point. I'm talking about bracelets, pendants, STUDS! Jewelry I wouldn't even think about buying twice because I simply wouldn't be able to afford it. Now that this alternative at this price point exists, I can totally see myself buying MMD just because it has the same optical properties as a real diamond! Who cares if they know it's MMD and not mined? I sure wouldn't, it looks just like diamonds. This is establishing a market for folks like me, who would have never thought to buy these certain pieces because they were simply not in the realm of possibilities. Now, what does that say for the future of <=100 pointers of mined diamonds? Even if I got rich somehow, and could afford a real mined equivalents of the pieces I spoke of before, why would I choose mined? Even if the pieces they sell themselves are not great jewelry, what stops me from removing the stone and putting that money towards a great piece, even if the piece itself is worth more than the MMD it holds? I highly doubt I would care cause it's HOLDING something that is chemically a diamond and can create that look!

You know maybe DeBeers grand plan is to just devalue <=1ct diamonds. We're talking about HONKERS here but what are they actually selling? Why pay >=5k when I can pay $800!! At that size, it's not even going to be a question about if it's "mined" regardless of what my actual income is! Sorry, this is probably antithetical to the board's sentiment, but I am personally very excited because I am a diamond lover because it's just so beautiful not because it's "exclusive". Now I can enjoy the beauty they provide at a fraction of a cost, and that makes me VERY EXCITED.

 

[TreeScientist]

I think the industry is already responding... Check out prices on Brilliant Earth for 1 carat MMDs:
https://www.brilliantearth.com/lab-diamonds-search/

If I remember correctly from my search a few months ago (I was briefly considering MMDs) a 1 carat D/VS1 Ideal cut MMD from Brilliant Earth was around $6-7k (so around 20% less than the mined equivalent).

Current price as of today: Around $4k

...I wonder what the prices will be come September?

Also, I really would be pissed right now had I bought a MMD a few months ago only to see this happen.

 

[Johnbt]

"I would propose that what a 'fake' item I am wearing says to you says more about you than it does about me"

I didn't say anything about fake anything. It was a simple observation about cost and young people.

But the odds of a 19-year-old pizza delivery driver or 21-year-old Uber driver in a KIA having a well cut 3 carat mined diamond aren't too good... at least in my 100-year-old historic district near the academic campus of Virginia Commonwealth University (a state school. Who knows about the Medical College campus downtown.)

Now, if I lived near the University of Richmond with its $50k+ yearly tuition and plethora of new BMWs I'd be inclined to believe the diamond was mined, but would be left wondering why the youngster was even working.)

 

[canuk-gal]

I was interested to see on their website that they're planning to sell necklaces and earrings, but no rings, and that they're setting them only in silver or 10K gold. Nothing bigger than 1ct, and no rings. They're positioning them as costume jewelry, very distinct from precious engagement jewelry. Of course, there would be nothing stopping you from buying (say) a 1 ct pendant in the cheapest silver setting and having it reset in a ring, but I think they're hoping people won't think of that or won't know how to do it--and maybe jewelers will cooperate in making it difficult. I very much doubt they'll be selling the MMDs loose, and it's interesting that they're not going above 1ct, at least not now.

Glitterata! Where have you been??? Nice to "see" you. Thread hijack over.

cheers--Sharon

 

[glitterata]

Glitterata! Where have you been??? Nice to "see" you. Thread hijack over.

cheers--Sharon

Hi, Sharon!! Just popped in because I saw news reports about De Beers marketing MMD and wanted to know what the community here thought. I'm mostly trying not to spend so much time (and $$!) online these days.

 

[sledge]

I would propose that what a 'fake' item I am wearing says to you says more about you than it does about me

Marketing is all about creating and securing a cachet, an image, a set of values attached to a product - people feel cheated by 'fakes' because they attach 'brand values' to the wearer and then feel 'let down' or 'cheated' when said wearer does not accord with those values.

A relevant example could be Patek, with their advertising that attempts to sell their products as being heirlooms for your good-looking children that will inherit your wealth and lifestyle that you have built up through your hard work as a fund manager etc. etc. (hence adverts depicting yachts and 'the beautiful people' etc.).

The fact is, of course, that a homeless person could spend $1 in dimes they've collected off the street on a lottery ticket and then go on to win $1m, then walk straight into a Patek store in their unwashed clothes and 2-years-of-beard-growth to lay down 30-large on a stainless steel(!) watch.

What would the casual observer think when they saw said person straight after they walked out of the store? That the watch was a 'fake'? That they'd robbed someone or the shop itself? That they should be reported to the police?

The fact is that plenty of people with substantial wealth buy fake goods. If you're stepping out of a $100k Porsche, who is going to question the watch on your wrist, the leather wallet in your pocket or the bag your wife is carrying?

If you're financially astute, why would you spend $10k on a single item when you could buy something replicating it almost exactly for $500?

People 'buy' the overall image of a person rather than any one single item, as per the example of the pizza boy. This is why so many people are obsessed with owning the latest car, the latest phone, the latest technological gadget - to do so suggest to others that 'you've made it' and are in the financial position to afford it.

The reality is, as we all know, that people are drowning in unsecured personal debt to keep up this facade. One couldn't possibly be seen to be unable to afford shiny new things, could one? One wouldn't want to be judged by others for not earning six-figures a year, would one?

The sooner people just accept other people for who they are inside and the quality of their actions within the world, rather than judging them by the goods they own or the way they look, the better, IMHO.

It is interesting to note that many very wealthy people deliberately choose to dress down, drive old cars, live in small houses, keep their wealth under wraps, because they don't want to be judged on their possessions or appearance in the abovementioned manner. By doing so they are trying to ensure that the people they do interact with judge them on their character instead of anything else., which I think is an excellent idea (although one really should be able to wear and buy whatever one wants without being judged for it...).


Anyway, I fear I am off topic


I look forward to being able to source 5ct rough for $4000, which can be cut into 2ct+ stepcuts! If people think I am a fraud and judge me for it, I won't particularly care - I'll be too busy staring at the light display from the massive rock on my finger

Love the post.

For the record, I know many wealthy people and would agree with your assessment that they many tend to dress down and "live small". That said, I've also seen correlation that those that EARNED their own wealth tend to live this way. In latter generations where wealth is passed down, you tend to see more show boating for status purposes.

Of course, how each of us sees and values things plays a vital role as well. For instance, regardless how wealthy I am, I will never be a buyer of designer sunglasses as I don't see the value. Nearly lost a $15 pair of cheapo's this weekend in my lake adventures because I chose to jump off a boat at high speed. Thankfully my cat like reflexes saved the day as I quickly snatched the glasses as they were on their descent to the bottom. My face would disagree as I look like a raccoon. The point being no matter how great a quality, the reality is I will lose them or utterly destroy them way before I get my money's worth so I will keep buying the knockoff's.

Where this really differs from the diamond market, at least IMO, is the brilliant advertising that has been forced down our throats saying that you simply don't love your girl unless you give her the real thing and the biggest real thing you can afford. Perhaps DeBeer's offering their clown jewelry in limited selection reinforces that primitive marketing campaign more than we realize.

 

[blueMA]

I don't see this as a genius move at all. I see it as a strategic defensive move, but as I mentioned earlier it'll inevitably hurt the market in time. DeBeers probably knows this already with the progress of the MMD market, and they're being more proactive on it while gabbing the piece of the pie. Nevertheless, it's a very risky unavoidable game.

I've noticed on PS that the majority of people upgrade their e-ring or earrings or plan to do so. I myself would never consider that because of the attached sentimentality and I don't particularly want to be perceived as overly materialistic. Regardless of people's motive for more, bigger, better diamonds, the overall market demand for the natural diamonds will undoubtedly shift. Sure there will always be ones who want nothing but the cool billion years old natural diamonds, but the market equilibrium will still shift because less will likely to spend huge costs for the upgrades and additional trinket pieces. Yes, engagement ring is an emotional thing, but that didn't stop people from upgrading the stones despite having debts, mortgages, and saving for retirement. Now the exclusivity changes - good luck on keeping up the hugely inflated price level by artificially suppressing the supply.

Handbags, watches, and other synthetic arguments don't apply as well because of the inherent quality differences have always been there. This is something different.

 

[Texas Leaguer]

A little more detail on the Debeers strategy here:
http://www.diamonds.net/News/NewsItem.aspx?ArticleID=62346

 

[Texas Leaguer]

I don't see this as a genius move at all. I see it as a strategic defensive move, but as I mentioned earlier it'll inevitably hurt the market in time. DeBeers probably knows this already with the progress of the MMD market, and they're being more proactive on it while gabbing the piece of the pie. Nevertheless, it's a very risky unavoidable game.

I see it as a genius strategic defensive move.

And like in the old days when Debeers was making and promoting the market for everyone in the diamond industry, now they are defending that market for everyone in the natural diamond industry. I personally hope they find it profitable selling MMD, but I do not think that is their real motive.

 

[OoohShiny]

A little more detail on the Debeers strategy here:
http://www.diamonds.net/News/NewsItem.aspx?ArticleID=62346

Thanks for the article link!

Interesting - they certainly are doing their very best to come across as completely dismissive as possible, as somone who feels threatened would do their very best to belittle their competitor(s).

Do we know who will be cutting them in India? IIRC they are cutting quite a lot of rough nowadays, and surely some of it must be to ideal standards.

If DeBeers do just cut any old cr*p (in terms of light performance, which it seems they will be doing as 'they aren't worth grading' so good luck in that lottery, buyers...) then I wonder if WF or BGD would be amenable to re-cutting, say, an average DeBeers (sorry, 'Lightbox') 1ct MMD into a 0.75ct SuperIdeal?

$800 for a 1ct MMD plus, what, $300 for a re-cut? would mean $1100 for a 0.75ct SuperIdeal MMD...

 

[HDer]

I love how they're taking every opportunity in their marketing material to crap on MMDs.

Also, while they claim transparent pricing, it looks like none of the items on their preview site actually feature a 1ct diamond: https://lightboxjewelry.com/collections/jewelry-preview/1-carat (note that all of them are 1ctw). I actually kind of doubt we'll see a true white solitaire at the 800 dollar mark. The synthetic guys are making money, but that must be cutting the margins to the bone.

Finally I wonder if they're going to cut these diamonds on purpose so that they can show a difference between them and the mined diamonds.

 

[blueMA]

I see it as a genius strategic defensive move.

And like in the old days when Debeers was making and promoting the market for everyone in the diamond industry, now they are defending that market for everyone in the natural diamond industry. I personally hope they find it profitable selling MMD, but I do not think that is their real motive.

It's an unavoidable move, and it simply adds to their bottom line while keeping up with the illusion for their core business. I really doubt they'll be able to successfully differentiate the market demand for the reasons I've mentioned already.

Now, if someone develops an inexpensive carbon dating scanner of a sort (for cell phones, etc) to readily differentiate the MMD to natural diamonds in the future, that's another story...

 

[Texas Leaguer]

You can be sure that Debeers has been thinking through the challenge for a long, long time. It is interesting that they believe now is the right time to throw down. I think it makes sense. This play is not for today's market, it is for a market years from today. True vision (and there is ALOT riding on getting this right) is about placing yourself at a fortuitous intersection of the FUTURE market. They may or may not be able to make any money today at the prices they have announced. It does not matter though, because eventually those prices will make money, and will ultimately have to be lowered considerably. What matters most is establishing the proper consumer psychology about MMD. And yes, disrupting the competition.

Debeers has just put themselves in the driver's seat of the MMD market. And they are taking a route that diverges sharply with where the other players were trying to go. I like their direction!