Diamonds as a commodity

[valeria101]

Well, commodity in what sense?

Even if extensive standardization eats up margins, the futures market is still missing...

... until someone issues bonds backed entirely by a stock of diamonds.

How far is that?

 

[valeria101]

Date: 1/21/2006 2:41:23 PM
Author: Serg

Second part. AGS said : We do separate grade for each type cut. We do not help to consumer which cut is better, We do not help to manufactures to create and move to market new beautiful cuts.

Quick note: virtually no website, add or search engine meant to show diamonds on the web allows different shapes to be compared side by side. They all assume viewers have already made their mind about the shape before the first click.

IMO, this does not even match the experience shopping on the ground.

It''s a strange world... the Web

 

[oldminer]

Saying apples are a commodity because they simply can be sold by the ton is a faulty analogy. You can sell almost any large quantity of any product by weight if you don't care about the characteristics of the individual components, but if you do care about uniformity and standards, then one must ask, what kind of apples, how long ago were they harvested, what variety are they, what percentage are spoiled?

Being able to purchase a commodity by weight is a "part" of an item being a commodity, but it does NOT define a commodity.

The value of each individual diamond is a complex derivative of its distinct and individual character. Even if you would wish to order 1000 1.00ct G-SI1 stones, all Ideal cut Ex/Ex you could not know for sure what the right price would be. There is enough variation in just this limited set that the purchaser could be well please, satisfied, or quite disappointed. Besides, who'd have that number of nearly identical stones to fill such a crazy order? If no one can fill large orders of distinct type and value, then the item is NOT a commodity......

 

[JohnQuixote]

Date: 1/21/2006 2:26:35 PM
Author: Lynn B

John,

I just HAVE to ask... what does the code 'SAS 0.400' mean as regards a 'D' colored stone? Does it have anything to do with 'D' being the 4th letter of the alphabet? What's the 'SAS' mean?!!

I know, I know! Totally nerdy question! But what do you expect from a diamond geek who loves Wheel of Fortune??!!

Thanks!

Lynn, SAS stands for spectrophotometer analysis system. The SAS2000 provides colorimetry accurate to far beyond the ability of human vision to discern. A diamond graded between 0.000 to 0.499 on the SAS is a D in its metric, 0.500-0.999 is an E, 1.000-1.499 an F, and so on. Even the labs judge color in 3 subdivisions within a grade, so your 'H' diamond could be high H, middle H or low H. Normal human vision cannot distinguish between a couple of color grades, so these measures (the SAS, other colorimeters, lab grading subdivisions) are much more than buyers will tend to worry about - especially once it's bought and on the wearer's finger.

it's just an example of how we can 'commoditize' what we perceive as color in a diamond to the nth degree - but such nth degree measures (and even D vs E or F at some level) are irrelevant to casual viewers who see the ring at a cocktail party. Real people speak in emotional terms like "how white" or "how sparkly." Rarely will someone stop you when you're picking up a cocktail weenie to say "Oh my goodness, look at your ring. It must be a strictly graded G, facing up colorless, with a 40.8 Pavilion!"

 

[Serg]

Date: 1/21/2006 3:05:58 PM
Author: oldminer
Saying apples are not a commodity because they simply can be sold by the ton is a faulty analogy. You can sell almost any large quantity of any product by weight if you don''t care about the characteristics of the individual components, but if you do care about uniformity and standards, then one must ask, what kind of apples, how long ago were they harvested, what variety are they, what percentage are spoiled?

Being able to purchase a commodity by weight is a ''part'' of an item being a commodity, but it does NOT define a commodity.

The value of each individual diamond is a complex derivative of its distinct and individual character. Even if you would wish to order 1000 1.00ct G-SI1 stones, all Ideal cut Ex/Ex you could not know for sure what the right price would be. There is enough variation in just this limited set that the purchaser could be well please, satisfied, or quite disappointed. Besides, who''d have that number of nearly identical stones to fill such a crazy order? If no one can fill large orders of distinct type and value, then the item is NOT a commodity......

Dave,

re Saying apples are not a commodity because they simply can be sold by the ton is a faulty analogy

May be you need delete NOT from this place and move to other place?

read again my post:

Unique is not enough to avoid commodity.
Each Apple is unique but 1 ton apple is commodity.

It is not faulty analogy. Did you saw quantity diamonds one day production big Indian manufacture? They are selling by paper only. If you want see diamonds you should pay +2%.

re:You can sell almost any large quantity of any product by weight if you don''t care about the characteristics of the individual components,

You can not sell large quantity of any product if you don''t care about the characteristics of the individual components,

 

[oldminer]

I tore the not out of my post above. My mistake and now corrected. Thanks Serg for pointing it out.

 

[strmrdr]

Dave,
hopefully we can talk about this without fighting :}

melee and low grade diamonds are allready sold that way.
When walmart wants 5000 copies of a ring to sell you can bet the stones arent sourced one by one by the supplier.
No reason that couldnt be expanded to say..
putting in an order for 1000 G-si gia ex/ex/ex diamonds or 1000 g-si AGS0 diamonds.
If someone with enough $$ wanted to do it that way someone would find a way to supply it.

 

[denverappraiser]

Date: 1/21/2006 2:45:36 PM
Author: valeria101

Well, commodity in what sense?

Even if extensive standardization eats up margins, the futures market is still missing...

... until someone issues bonds backed entirely by a stock of diamonds.

How far is that?

What an interesting idea. I think we’re pretty far from this or, perhaps, we’re already there. To sell securities based on diamond inventory involves an assumption that the holding company can increase or reduce their holdings as they gain or lose capital or based on their estimations of the future market. To some degree, this is exactly what diamond dealers do and, as some of them are public companies, you are effectively doing this when you buy their stock. A more direct model would be something in the vein of a Real Estate Investment Trust that’s underwritten by diamonds instead of Real Estate. Rather like when you buy into a REIT, you would be betting that the management is sufficiently skilled to buy properly and that they have an appropriate avenue to sell when required. This is exactly the skill set of the diamond dealers so, again, it may be more direct to simply buy stock in one of them. Unlike a REIT, there isn’t any revenue associated with holding the inventory (there’s no rental income available) so it would be a pure equity play and the holding period is going to become important. Minor differences in buying or selling skills could prove to be the most important issue. Once again this is a big issue for diamond dealers and it’s far from an obvious skill. I’m not sure I would say Blue Nile stock is exactly investing in commodity diamonds for the new era since they actively avoid carrying inventory but it does seem to have all of the elements. Am I missing something?

Neil Beaty
GG(GIA) ISA NAJA
Professional Appraisals in Denver

 

[Lynn B]

Date: 1/21/2006 3:18:36 PM
Author: JohnQuixote

Date: 1/21/2006 2:26:35 PM

Author: Lynn B


John,


I just HAVE to ask... what does the code ''SAS 0.400'' mean as regards a ''D'' colored stone? Does it have anything to do with ''D'' being the 4th letter of the alphabet? What''s the ''SAS'' mean?!!


I know, I know! Totally nerdy question! But what do you expect from a diamond geek who loves Wheel of Fortune??!!

Thanks!

Lynn, SAS stands for spectrophotometer analysis system. The SAS2000 provides colorimetry accurate to far beyond the ability of human vision to discern. A diamond graded between 0.000 to 0.499 on the SAS is a D in its metric, 0.500-0.999 is an E, 1.000-1.499 an F, and so on. Even the labs judge color in 3 subdivisions within a grade, so your ''H'' diamond could be high H, middle H or low H. Normal human vision cannot distinguish between a couple of color grades, so these measures (the SAS, other colorimeters, lab grading subdivisions) are much more than buyers will tend to worry about - especially once it''s bought and on the wearer''s finger.


it''s just an example of how we can ''commoditize'' what we perceive as color in a diamond to the nth degree - but such nth degree measures (and even D vs E or F at some level) are irrelevant to casual viewers who see the ring at a cocktail party. Real people speak in emotional terms like ''how white'' or ''how sparkly.'' Rarely will someone stop you when you''re picking up a cocktail weenie to say ''Oh my goodness, look at your ring. It must be a strictly graded G, facing up colorless, with a 40.8 Pavilion!''

Thanks, John! I learned something today!
Lynn

 

[JohnQuixote]

Ana, you are ahead of your time.

Date: 1/21/2006 3:55:32 PM
Author: denverappraiser

I’m not sure I would say Blue Nile stock is exactly investing in commodity diamonds for the new era since they actively avoid carrying inventory but it does seem to have all of the elements. Am I missing something?

Those crafty Nilers. Buying on margin without the risks.

 

[adamasgem]

Date: 1/21/2006 3:18:36 PM
Author: JohnQuixote

Date: 1/21/2006 2:26:35 PM
Author: Lynn B

John,

I just HAVE to ask... what does the code ''SAS 0.400'' mean as regards a ''D'' colored stone? Does it have anything to do with ''D'' being the 4th letter of the alphabet? What''s the ''SAS'' mean?!!

I know, I know! Totally nerdy question! But what do you expect from a diamond geek who loves Wheel of Fortune??!!

Thanks!

Lynn, SAS stands for spectrophotometer analysis system. The SAS2000 provides colorimetry accurate to far beyond the ability of human vision to discern. A diamond graded between 0.000 to 0.499 on the SAS is a D in its metric, 0.500-0.999 is an E, 1.000-1.499 an F, and so on. Even the labs judge color in 3 subdivisions within a grade, so your ''H'' diamond could be high H, middle H or low H. Normal human vision cannot distinguish between a couple of color grades, so these measures (the SAS, other colorimeters, lab grading subdivisions) are much more than buyers will tend to worry about - especially once it''s bought and on the wearer''s finger.

it''s just an example of how we can ''commoditize'' what we perceive as color in a diamond to the nth degree - but such nth degree measures (and even D vs E or F at some level) are irrelevant to casual viewers who see the ring at a cocktail party. Real people speak in emotional terms like ''how white'' or ''how sparkly.'' Rarely will someone stop you when you''re picking up a cocktail weenie to say ''Oh my goodness, look at your ring. It must be a strictly graded G, facing up colorless, with a 40.8 Pavilion!''

I sort of disagree John. I think consumers want to know if they are getting a "true D" or a "new D" when the difference in price may be tens of thousands of dollars.
Look at the wholesale price difference for a 1 carat IF round between D and E color, and you may be talking $6000 or more.
As it is, a one color grade shift on the average 1ct stone, all other factors being equal, may cost a consumer a grand or more.

Certainly, in larger stones, we are talking big big bucks, between an objectve analysis (with confidence bounds) and a purely subjective (or sometimes biased because of kickbacks) grading... Perhaps that type of objective analysis had something to do with the exposure of the GIA grading scandal.

I have a SAS2000 unt in Dubai, but that came after the first GIA fiasco started, I think.

Objective measures help the consumer in some cases. when they are "sold" as objective and are less than that, as in the cut grading issue, comsumers may be hurt, because their judgement is clouded by UNDEFINED superlative grading, like "excellent"

 

[JohnQuixote]

Date: 1/21/2006 11:37:07 PM
Author: adamasgem

Date: 1/21/2006 3:18:36 PM
Author: JohnQuixote

Date: 1/21/2006 2:26:35 PM
Author: Lynn B

John,

I just HAVE to ask... what does the code 'SAS 0.400' mean as regards a 'D' colored stone? Does it have anything to do with 'D' being the 4th letter of the alphabet? What's the 'SAS' mean?!!

I know, I know! Totally nerdy question! But what do you expect from a diamond geek who loves Wheel of Fortune??!!

Thanks!

Lynn, SAS stands for spectrophotometer analysis system. The SAS2000 provides colorimetry accurate to far beyond the ability of human vision to discern. A diamond graded between 0.000 to 0.499 on the SAS is a D in its metric, 0.500-0.999 is an E, 1.000-1.499 an F, and so on. Even the labs judge color in 3 subdivisions within a grade, so your 'H' diamond could be high H, middle H or low H. Normal human vision cannot distinguish between a couple of color grades, so these measures (the SAS, other colorimeters, lab grading subdivisions) are much more than buyers will tend to worry about - especially once it's bought and on the wearer's finger.

it's just an example of how we can 'commoditize' what we perceive as color in a diamond to the nth degree - but such nth degree measures (and even D vs E or F at some level) are irrelevant to casual viewers who see the ring at a cocktail party. Real people speak in emotional terms like 'how white' or 'how sparkly.' Rarely will someone stop you when you're picking up a cocktail weenie to say 'Oh my goodness, look at your ring. It must be a strictly graded G, facing up colorless, with a 40.8 Pavilion!'

I sort of disagree John. I think consumers want to know if they are getting a 'true D' or a 'new D' when the difference in price may be tens of thousands of dollars.
Look at the wholesale price difference for a 1 carat IF round between D and E color, and you may be talking $6000 or more.
As it is, a one color grade shift on the average 1ct stone, all other factors being equal, may cost a consumer a grand or more.

Certainly, in larger stones, we are talking big big bucks, between an objectve analysis (with confidence bounds) and a purely subjective (or sometimes biased because of kickbacks) grading... Perhaps that type of objective analysis had something to do with the exposure of the GIA grading scandal.

I have a SAS2000 unt in Dubai, but that came after the first GIA fiasco started, I think.

Objective measures help the consumer in some cases. when they are 'sold' as objective and are less than that, as in the cut grading issue, comsumers may be hurt, because their judgement is clouded by UNDEFINED superlative grading, like 'excellent'

Marty, no argument. You're saying the same thing I said all through page 1 regarding a need for some level of commoditization on behalf of consumers so that they can justify the purchase.

I was on to another point entirely for Lynn: After the purchase very few consumer/viewers will ever see the diamond at a cocktail party and start asking what color grade it is or what # it scored on the SAS. Normal human nomenclature post-sale is different and refers more to emotional impact & aesthetics than grades or numbers. That is all.

 

[aljdewey]

Date: 1/21/2006 2:47:47 AM
Author: strmrdr
Garry some what true but the vast majority of diamonds are still bought in the US to keep the Lady happy.
When the price hits a point that the LAdy would rather have a car or a down payment on a house watch the market for diamonds crash.

I can''t say I wholeheartedly agree with this.

For the engagement diamond market, it is a purchase based far more on emotion than on rationality, and I don''t believe most are willing to give up that expectation or experience. Years of marketing have firmly ensconced both men and women in the idea of giving an engagement diamond. I don''t see many women choosing one (car/house/etc) or the other (ring); rather, I''d see them figuring out what they can compromise on to have both (less expensive car to get ring; less expensive house to get ring; less expensive ring to get house and ring....etc.)

Let''s face it...most women don''t run around announcing their engagement by showing a photograph of their new engagement car or engagement house.

Date: 1/21/2006 2:47:47 AM
Author: strmrdr

How many people lately have been buying diamonds on PS with the purpase of trading them up to what they actualy want.

Actually, I believe this very fact supports what I noted above. Most folks (men and women) have bought into the "magic 1-ct" notion, and what we''ve seen is people stretching to the limits of color/clarity to maintain that size if it''s possible without sacrificing quality. When that''s no longer possible, though, the choice is to simply start smaller and upgrade. It doesn''t usually mean NO ring.....it just means more modest until financial circumstances improve. Some people will choose to go to K stones or to the rare clean I1 stones; others will look in the .80-.90 range.

There have been *several* women in LIW who''ve had engagement hopes stalled due to money, and yet none of them is saying "ok, I''d rather go without a ring." No...they simply readjust their expectations to accommodate the change in budget.

You''re also forgetting that e-rings are only a segment of the market. Diamonds as gifts (earrings, necklaces, bracelets, etc) are still a luxury purchase, and they are most commonly purchased by folks with a healthy amount of discretionary income for luxury purchases.....the "recession-proof" set. In fact, for the really well-off set, it''s almost MORE allure that something becomes MORE pricey. It therefore becomes more ''exclusive'' and desired by the status-conscious.

I have a really hard time forseeing the diamond market "crashing" over price increases.

 

[Garry H (Cut Nut)]

Date: 1/21/2006 2:45:36 PM
Author: valeria101

Well, commodity in what sense?

Even if extensive standardization eats up margins, the futures market is still missing...

... until someone issues bonds backed entirely by a stock of diamonds.

How far is that?

That is achievable Ana.

Here is an index based on 1/4 a tonne of diamond commodity sales:
http://www.idexonline.com/

 

[aljdewey]

Date: 1/21/2006 1:48:14 PM
Author: 19th Hole
Hi all,
If I may add a thought to this discussion, the very connotation of the word commodity, implies that it occurs in quantity, time and again, over and over, i.e. commo(n)dity. In my mind, diamond could never be a commodity. If you lined up 100 stones that were 2.00ct G-SI1 Round, no two of them would be alike. There is, in the least, a nuance to each one that separates it from all others. That''s what makes each diamond so unique. Every crystal is different whether it be rough or polished.
After all, it''s rarity and beauty that creates value, and therefore makes diamond different from all other articles of commerce. Thanks for reading.

Stephen Marino
Professional Appraiser
Boston & vicinity

This is a very lovely description, but I believe it''s only marginally relevant to the consumer.

Yes, 100 diamonds will all be different....just like snowflakes. But honestly, I don''t care what kind of inclusion a stone has as long as I can''t see it and it doesn''t affect the durability of the stone. So yes, the G-SI1 with the crystal is *technically* and *factually* different from the G-SI1 with the feather......but who cares? For my purposes (wearing it in a setting), I can''t see the difference, so for my purposes, they aren''t different in the ways that I care about as a consumer.

Rarity matters more to collectors or gemologists and less to everyday consumers. I believe men tend to care more about that than women, and I think it''s because the MEN are the ones who are obsessed with buying her "the best", the "ring she deserves", and tying all this emotional stuff into the specs of the ring. Most women I know are far less hung up on "rarity". C''mon.....almost every engaged woman I know receives a diamond of some sort, so the notion of rarity is a bit passe. Since beauty depends on the viewer, it''s really up to the consumer to determine what looks beautiful to him.

I did the "soda challenge" when I was at WF. I picked out the E and the J....but only by comparison next to other stones. I couldn''t likely do it by finding one woman in the mall wearing a J and one wearing an E.

Even with my passion for the stones, I couldn''t see discernable differences between the branded and non-branded; between the "perfect" H&As and the nearly perfect; etc. I couldn''t likely do it by finding one woman in the mall wearing a J and one wearing an E.

 

[valeria101]

Date: 1/22/2006 12:59:51 AM
Author: Garry H (Cut Nut)

Date: 1/21/2006 2:45:36 PM
Author: valeria101

Well, commodity in what sense?

Even if extensive standardization eats up margins, the futures market is still missing...

... until someone issues bonds backed entirely by a stock of diamonds.

How far is that?

That is achievable Ana.

Here is an index based on 1/4 a tonne of diamond commodity sales:
http://www.idexonline.com/

Yeah... I was thinking worse, in fact: that some of the usual effects of a futures market should be there (believing ABN reports about financing, and knowing of these traditionally shared wholesalers'' lists downstream), but without the instruments per se.

 

[Garry H (Cut Nut)]

Date: 1/22/2006 1:05:23 AM
Author: aljdewey

This is a very lovely description, but I believe it''s only marginally relevant to the consumer.

Yes, 100 diamonds will all be different....just like snowflakes. But honestly, I don''t care what kind of inclusion a stone has as long as I can''t see it and it doesn''t affect the durability of the stone. So yes, the G-SI1 with the crystal is *technically* and *factually* different from the G-SI1 with the feather......but who cares? For my purposes (wearing it in a setting), I can''t see the difference, so for my purposes, they aren''t different in the ways that I care about as a consumer.

Rarity matters more to collectors or gemologists and less to everyday consumers. I believe men tend to care more about that than women, and I think it''s because the MEN are the ones who are obsessed with buying her ''the best'', the ''ring she deserves'', and tying all this emotional stuff into the specs of the ring. Most women I know are far less hung up on ''rarity''. C''mon.....almost every engaged woman I know receives a diamond of some sort, so the notion of rarity is a bit passe. Since beauty depends on the viewer, it''s really up to the consumer to determine what looks beautiful to him.

I did the ''soda challenge'' when I was at WF. I picked out the E and the J....but only by comparison next to other stones. I couldn''t likely do it by finding one woman in the mall wearing a J and one wearing an E.

Even with my passion for the stones, I couldn''t see discernable differences between the branded and non-branded; between the ''perfect'' H&As and the nearly perfect; etc. I couldn''t likely do it by finding one woman in the mall wearing a J and one wearing an E.

A tihink you are onto something Al

How does this statement fit/ sound?

Throught history men have been attracted to possessing rare and luxurious things. While women have played their part in using and enjoying them.

 

[valeria101]

Date: 1/22/2006 6:01:35 AM
Author: Garry H (Cut Nut)



How does this statement fit/ sound?

Throughout history men have been attracted to possessing rare and luxurious things. While women have played their part in using and enjoying them.

Hm... thinking of medieval curio cabinets with stuffed monsters and coconut goblets

About diamonds - Garry & AL, do you think ''user grades'' would be severely different from the status quo? The discussion about the environment selected for cut grading and Serghey''s thread sort of hint at this - in my mind. But the relation is somewhat shaky, for me.

 

[adamasgem]

Date: 1/22/2006 12:07:14 AM
Author: JohnQuixote

Marty, no argument. You''re saying the same thing I said all through page 1 regarding a need for some level of commoditization on behalf of consumers so that they can justify the purchase.

I was on to another point entirely for Lynn: After the purchase very few consumer/viewers will ever see the diamond at a cocktail party and start asking what color grade it is or what # it scored on the SAS. Normal human nomenclature post-sale is different and refers more to emotional impact & aesthetics than grades or numbers. That is all.

I don''t know if the word we should be discussng is commoditization. I prefer (or think) the issue is TRUTH IN ADVERTIZING, the biggest problem in the industry, along with a set of consistent and meaningfull STANDARDS by the labs to back up the advertizing.

 

[oldminer]

I do agree that for some users, like the major chains, small, poor quality melee is a commodity and has been for many years. The factors that make these diamonds a form of a commodity don''t readily apply to larger diamonds. Sure, I suppose some further low end diamonds will be commoditized by more accurate,consistent and descriptive grading, but I just can''t envision the kinds of diamonds consumers want for major stones ever becoming commodities. A commodity is a product where one is alike all the rest. This just does not work for larger diamonds where distinctions are nearly infinite between most of them.

 

[icefisher]

Is the "fear" of commoditization that strmdr referred to at the outset of this thread, a fear that grading standards (to the extent they are that) and the internet will make the retail diamond market like the market for widgets or computers or any other fungible good? Because if so, that to me really sounds like a complaint about the introduction of greater market efficiencies, which history in general shows is a losing proposition.

But if that IS what''s meant by commodization, it seems to me that those who fear it should at least take solace that it''s probably expanding the overall market. I''m probably typical of some small segment of purchasers in that buying my wife''s original ring in 1987 was akin to a root canal for me; had the diamond market in 2005/06 been the same as it was then, she would''ve found a remodeled kitchen under the tree instead. To quote JFK (not Teddy), a rising tide lifts all boats....

 

[adamasgem]

Date: 1/22/2006 11:50:50 AM
Author: icefisher
But if that IS what''s meant by commodization, it seems to me that those who fear it should at least take solace that it''s probably expanding the overall market. I''m probably typical of some small segment of purchasers in that buying my wife''s original ring in 1987 was akin to a root canal for me; had the diamond market in 2005/06 been the same as it was then, she would''ve found a remodeled kitchen under the tree instead. To quote JFK (not Teddy), a rising tide lifts all boats....

I like the root canal analogy.. very appropriate

As one who has "shopped" both the internet and brick and mortar retailers from 47th street to Amsterdam over the years, and listened and read some of the song and dance routines as well as havng seen some of the BS "paper" out there, I have been continuously been reminded of a 1980''s board game called "Lie, Cheat and Steal".

 

[JohnQuixote]

Date: 1/22/2006 11:50:50 AM
Author: icefisher

Is the 'fear' of commoditization that strmdr referred to at the outset of this thread, a fear that grading standards (to the extent they are that) and the internet will make the retail diamond market like the market for widgets or computers or any other fungible good? Because if so, that to me really sounds like a complaint about the introduction of greater market efficiencies, which history in general shows is a losing proposition.

But if that IS what's meant by commodization, it seems to me that those who fear it should at least take solace that it's probably expanding the overall market. I'm probably typical of some small segment of purchasers in that buying my wife's original ring in 1987 was akin to a root canal for me; had the diamond market in 2005/06 been the same as it was then, she would've found a remodeled kitchen under the tree instead. To quote JFK (not Teddy), a rising tide lifts all boats....

Good reset IF. Yes, that's what I have been discussing. This is the buzz about commoditization offered in discussions at our trade events and periodicals. The 'fear' is largely from those who believe what the internet is doing shrinks their margins and devalues their product by making economic info the focus - as opposed to cooing and purring over shiny diamonds in the case as a focus.

Dave's page 1 quote:

Date: 1/21/2006 12:35:11 PM
Author: oldminer

To those dealers who are being squeezed out of the business, diamonds have become a commodity because the human interaction they once provided is no longer required, but the truth is quite different. The market is just gaining efficiency, even while the product becomes ever so more complex.

I think so too. IceFisher, I'd just amend your last words to: A rising tide lifts all boats - EXCEPT those anchored in old ways. And you know what happens to them...

 

[valeria101]

Well said 'icefisher'. So case in point! Thanks for the reset

Date: 1/22/2006 11:50:50 AM
Author: icefisher


Is the 'fear' of commodization that strmdr referred to at the outset of this thread, a fear that grading standards (to the extent they are that) and the internet will make the retail diamond market like the market for widgets or computers or any other fungible good?

If so... so what? Would that make diamonds 'mundane'? Was that the question? (also Q for Strmdr)



Because if so, that to me really sounds like a complaint about the introduction of greater market efficiencies, which history in general shows is a losing proposition.

You are an optimist

 

[aljdewey]

Date: 1/22/2006 10:58:54 AM
Author: oldminer

A commodity is a product where one is alike all the rest. This just does not work for larger diamonds where distinctions are nearly infinite between most of them.

I think the key here, Dave, from a consumer standpoint: They are ALIKE. Not IDENTICAL, and to us, they don't HAVE to be. As long as they share the same color, clarity, and *substantially similar* cut quality, that's really all that matters to most of the masses. Of course, we expect that the elements are graded by a top-shelf lab, but that's really the only significant variable.

Some of you just don't want to accept that the *infinitessimal, minute distinctions* just don't matter to many of us. I don't care if it's a cloud or a feather or a twining wisp....if I can't see it, that's ALL I care about. Until some of you can accept the notion of what matters to the *customer*, you're going to be frustrated and confounded.

Granted, not all customers feel as I do. There are those who relish in the "rarity, one-of-a-kind" mentality.....but seriously, MUCH more of the majority falls on the side I'm on.

Simply put: There are ever-so-slight distinctions that elevate diamonds to "non-commodity" items for those who appreciate and pay attention to those details. For those who don't appreciate or don't care about those details, diamonds become a commodity.

 

[Serg]

re:This just does not work for larger diamonds where distinctions are nearly infinite between most of them.

Dave,

I will try explain problem from other side:

First Part: Take big Diamond D/IF GIA EX and AGS0 in same time.( in new system) Is most consumers can see difference between such diamonds?

Second Part: *8 can not receive GIA EX more at all. Do you know reason why ? Is *8 not really Excellent diamond?

*8 is beautiful diamond, But it is not STANDARD round cut only! New AGS and GIA cut grade systems JOINTLY break developing and variety in CUT.

Is it good direction for diamond market?

 

[aljdewey]

Date: 1/22/2006 1:02:50 PM
Author: JohnQuixote

This is the buzz about commoditization offered in discussions at our trade events and periodicals. The ''fear'' is largely from those who believe what the internet is doing shrinks their margins and devalues their product by making economic info the focus - as opposed to cooing and purring over shiny diamonds in the case as a focus.

Yep....the fear is that instead of being able to seduce the customer into thinking that''s *THE* diamond for him....the ONLY one that will do because there is *no other one like it*, said customer might be able to set *emotion* aside and realize that he could be happy with *any* diamond meeting a substantially similar criteria.

Gosh, that would mean he''d actually have to really sell for a living. He''d actually have to do more than seduce someone into a sale by getting the buyer or buyer''s girlfriend to fall in love with that stone. He''d actually have to illustrate the "whole package" value of buying from him (cleanings, upgrades, trade-ups, buy-backs, etc. etc.) . He''d actually have to arm himself with sound INFORMATION to illustrate why he has a lot to offer. No wonder some are fearful....they don''t know how to demonstrate the value they offer.

 

[adamasgem]

Date: 1/22/2006 1:51:07 PM
Author: Serg
re:This just does not work for larger diamonds where distinctions are nearly infinite between most of them.

Dave,

Second Part: *8 can not receive GIA EX more at all. Do you know reason why ? Is *8 not really Excellent diamond?

*8 is beautiful diamond, But it is not STANDARD round cut only! New AGS and GIA cut grade systems JOINTLY break developing and variety in CUT.

I thnk the answer is in two parts
1) that GIA might not have done the job right yet
2) That the Sarin GIA relies on for measurements, can''t cut the mustard when it comes measuring to the 8* style of cutting, from the scans I''ve seen...

 

[Serg]

http://www.diamondcut.gia.edu/06_estimating_a_cut_grade.html

http://www.diamondcut.gia.edu/06_estimating_a_cut_grade.html

Factors Affecting Results

The GIA Facetware™ Cut Estimator is intended to provide an estimation of the cut grade that would be received from the GIA Laboratory for the same diamond. However, there are several reasons why the grade provided by GIA Facetware™ may be different from that received from the GIA Laboratory. Some of the reasons are:

The diamond''s actual proportions (such as the crown angle or star length) or visually assessed parameters (such as the girdle thickness or symmetry) as determined by the GIA Laboratory are different from the proportions or parameters assumed by the user.

The diamond has been manufactured using non-standard brillianteering such that it is significantly "painted" or "dug-out" (i.e., the diamond has its upper- and/or lower-half facets fashioned at tilt angles different from those traditionally used for standard round brilliant diamonds). Click here to learn more.

The accuracy and tolerances of different methodologies and optical devices used to measure a diamond''s proportions or parameters may differ from those used by GIA. Click here to learn more.

*8 has not chance to receive Ex.

 

[oldminer]

I would love AGA to become the lab of choice for a great stone like an 8*....Why not? If the GIA system eliminates such a stone from their best category, then something has gone wrong.

These are distinctly different than standard cut diamonds in certain small and precise respects, but are not a special category of diamond cut, in my opinion. It matters how one defines a "cut".

I have not tested an 8* on ImaGem and would welcome the opportunity to try a couple. I''d be glad to share the results. I''d even pay shipping both ways if I have a volunteer to supply a couple stones for a day......