Excellent Article: Diamonds in Todays Context

[Garry H (Cut Nut)]

Natural diamonds are more than just an investment - Times of India

Russell Mehta reflects on the diamond industry's evolution, noting a shift from romantic experiences to transactional purchases due to increased trans

timesofindia.indiatimes.com

 

[Ibrakeforpossums]

Natural diamonds are more than just an investment - Times of India

Russell Mehta reflects on the diamond industry's evolution, noting a shift from romantic experiences to transactional purchases due to increased trans

timesofindia.indiatimes.com

Good writing.

 

[Garry H (Cut Nut)]

RosyBlue are or were the largest polishing firm with operations in several countries.
I recollect they were a supplier to Hearts on Fire and bought that company a while back.

 

[LilAlex]

I think it reads more like a press release. So 3% annual increase in diamond value over many years (with no time frame indicated)? I don't know the India Times but this must be paid (or at least conflicted) content. And attacking the straw man of "recent...doubts" about diamonds as a viable investment -- when almost no one has thought they were a viable investment for nearly a half-century (right?). Yes, they are coveted and gorgeous and can bring a nice profit in a retail environment and retain some value -- but that is not what constitutes an "investment."

 

[Karl_K]

Just poking a little fun....
"But for his 10th wedding anniversary, his gift would be the real thing, a natural diamond."

"real thing" - real? are lab diamonds imaginary?
10 years from now some guy somewhere.....
hmmmm
Which would she rather have to go with her 3ct lab er ring and 1ctw wedding band?
A .75ct natural diamond pendant or a 5ct yellow lab diamond pendant and 3ctw lab diamond earrings?
hmmm could play it smart and get the pendant for our anniversary and the earrings for her birthday.
She deserves it.

Edit: This is just how I see it playing out, no one really knows how it will turn out in 10 years.

 

[kenny]

Oh come on guys, maybe the author just drank too many of ... Dhe Beers.

 

[DejaWiz]

Laughable phrasing




Everything good comes with strict grading and reporting plus ease of accessibility and comparison, which is a boon to consumers.
The opposite is only a boon to the unscrupulous players of the diamond industry that would push junk at exorbitant prices onto unsuspecting and unaware buyers...which was the traditional MO, in my opinion.

 

[Ibrakeforpossums]

RosyBlue are or were the largest polishing firm with operations in several countries.
I recollect they were a supplier to Hearts on Fire and bought that company a while back.

Matthew Hart's excellent book, Diamond: The History of a Cold-Blooded Love Affair, has a great chapter on Rosy Blue.

 

[Garry H (Cut Nut)]

Matthew Hart's excellent book, Diamond: The History of a Cold-Blooded Love Affair, has a great chapter on Rosy Blue.

Tell us more please?

 

[Ibrakeforpossums]

The chapter starts with the marriage of Russell Mehta's daughter to the son of a prosperous cutter, very lavish affair, then goes back to Arun Mehta who started the company. Indian polishers would buy "Antwerp rejections" and turn them into jewelry. " . . . the emergence of a new order of diamond jewel, available to people who could not otherwise afford to buy diamonds." I'm wearing a used ZEI bracelet now, it's pretty tiny and not so good, but it's a piece of history.
I re- read this book every year, from Cecil Rhodes to Canada, it's a wonderful and entertaining overview of the industry.

 

[Garry H (Cut Nut)]

The chapter starts with the marriage of Russell Mehta's daughter to the son of a prosperous cutter, very lavish affair, then goes back to Arun Mehta who started the company. Indian polishers would buy "Antwerp rejections" and turn them into jewelry. " . . . the emergence of a new order of diamond jewel, available to people who could not otherwise afford to buy diamonds." I'm wearing a used ZEI bracelet now, it's pretty tiny and not so good, but it's a piece of history.
I re- read this book every year, from Cecil Rhodes to Canada, it's a wonderful and entertaining overview of the industry.

Great. Thanks. You might like the impossible diamond mine. Argyle. Stuart Kells.
I remember friends in Ashton and Rio debating which car to give the bride and groom.

 

[Ibrakeforpossums]

Found the book on ebay, will buy.

 

[Texas Leaguer]

The chapter starts with the marriage of Russell Mehta's daughter to the son of a prosperous cutter, very lavish affair, then goes back to Arun Mehta who started the company. Indian polishers would buy "Antwerp rejections" and turn them into jewelry. " . . . the emergence of a new order of diamond jewel, available to people who could not otherwise afford to buy diamonds." I'm wearing a used ZEI bracelet now, it's pretty tiny and not so good, but it's a piece of history.
I re- read this book every year, from Cecil Rhodes to Canada, it's a wonderful and entertaining overview of the industry.

Matthew Hart's excellent book, Diamond: The History of a Cold-Blooded Love Affair, has a great chapter on Rosy Blue.

I read another book by Hart about diamond prospecting. Fascinating and so well written. I will put this one on my list.

 

[Texas Leaguer]

I agree with @DejaWiz that transparency has been a great thing for consumers. And I don't think that self-interested secrecy creates a positive mystique. The actual properties of a natural diamond, it's billions' year journey, its inherent rarity, its incredible durability, and the remarkable things it does with light are diamond's true virtues and why it makes the perfect symbol to mark the special moments in life.

 

[Ibrakeforpossums]

I read another book by Hart about diamond prospecting. Fascinating and so well written. I will put this one on my list.

Hart's book was published here in the U.S. under a different title. If the book you read began with three Brazilians on a raft after a pink diamond, it's the same book.

 

[Texas Leaguer]

Hart's book was published here in the U.S. under a different title. If the book you read began with three Brazilians on a raft after a pink diamond, it's the same book.

Yes, it appears to be the same book with a different title. The title I read (many years ago) was Diamond: A Journey to the Heart of Obsession.
I did not remember the Brazilians on a raft after a pink! I may have to read it again. What a hook

 

[Texas Leaguer]

I will say that I agree with the general sentiment of the article. And particularly the comparison of fine natural diamonds to fine original art.

A very passionate diamond researcher once described a diamond as "a tiny sculpture made of mirrors". And that stuck with me as a particularly insightful way to think of diamonds.

 

[freddyboston]

Yes, it appears to be the same book with a different title. The title I read (many years ago) was Diamond: A Journey to the Heart of Obsession.
I did not remember the Brazilians on a raft after a pink! I may have to read it again. What a hook

indeed !!!

Matthew Hart wrote about diamonds and gold. One day, he got the call from Brazil—an 81-carater came out of the river......

How the Discovery of a Rare Pink Diamond Led One Reporter into the World of Thrillers

A pink diamond is a key into the human heart, where it unlocks the store of delight, love, treachery, and greed that distinguishes us from other animals. I’m a sucker for a pink. When I lived in Lo…

crimereads.com

 

[Garry H (Cut Nut)]

A very passionate diamond researcher once described a diamond as "a tiny sculpture made of mirrors". And that stuck with me as a particularly insightful way to think of diamonds.

A tiny sculpture made of mirrors!
Brilliant!
My darling wife wants me to actually make a round brilliant 50cm diameter out of plastic mirrors. I have tried using paid versions of ChatGPT and Claude and can not get the templates in CAD form to give to a laser cutting company to precisely shape for me. Any suggestions welcomed!

 

[Rockdiamond]

Very emotional and cool view.
For me, describing diamonds in that manner is counter to my view- and experience.
The value of diamonds can fluctuate, but it doesn’t depreciate ..
A statement like that is either ill informed or purposely misleading.
The darn things depreciate the instant a consumer ( or dealer) buys one.
Dealers, in a perfect world can add enough value to ultimately make a profit- but even a dealer, strapped for cash that needs to sell- will suffer losses selling into the market.
The intrinsic value of natural diamonds will likely buoy the value over time.
Even now, natural brown diamonds are getting harder to find.
That bolsters the value of something traditionally bashed for most collectors/ diamond lovers.
That segment is probably a good example of what we may see as the rarity of mined diamonds versus man made stones becomes more accentuated.
Who knows.
As Yogi said- I’m excellent at predicting things- except if they are supposed to happen in the future ( or something like that)

 

[Garry H (Cut Nut)]

Very emotional and cool view.
For me, describing diamonds in that manner is counter to my view- and experience.
The value of diamonds can fluctuate, but it doesn’t depreciate ..
A statement like that is either ill informed or purposely misleading.
The darn things depreciate the instant a consumer ( or dealer) buys one.
Dealers, in a perfect world can add enough value to ultimately make a profit- but even a dealer, strapped for cash that needs to sell- will suffer losses selling into the market.
The intrinsic value of natural diamonds will likely buoy the value over time.
Even now, natural brown diamonds are getting harder to find.
That bolsters the value of something traditionally bashed for most collectors/ diamond lovers.
That segment is probably a good example of what we may see as the rarity of mined diamonds versus man made stones becomes more accentuated.
Who knows.
As Yogi said- I’m excellent at predicting things- except if they are supposed to happen in the future ( or something like that)

Remember David, this was written for an Indian audience in India.
Firstly: Jewelry is a big part of peoples "investments" there and the margins can be razor thin. So the post purchase value tends to be higher than in high wages, high cost western country environments where ever changing fashion plays a more important role.
Secondly: Depreciation is a factor that varies for the fashion and style reasons mentioned above. But consider the intrinsic value of gold and diamonds. That is what Russell is referring to. I have safes in my stores that I bought decades ago - the Australian Tax office dictates they depreciate at 2% per year. I buy one for $10,000 and they only let me take a tax write off $200 PA.
Since a diamond is a diamond and generally show very little wear and tear after 100 years, a Tax office might say the depreciation rate is 1% PA.

 

[Bron357]

The whole concept of jewellery and gems to adorn the body is an interesting one.
It has nothing to do with human basic needs like shelter, food, safety and community.
At some time in our evolution we decided that we liked useless but pretty things and enough of us felt the same way for there to be competition to fulfil the desire to obtain and/or adorn our bodies.
Things of great beauty and great rarity compel intense competition and so it’s the one with the most money who secures the prize. However being marooned on a desert island with the Crown Jewels would provide some awesome sparkles as you starved to death or fell foul of the elements or creatures whereas a decent knife would be of “more value” as it could save your life.
Most people know that if you have a big diamond you had enough money after fulfilling basic needs to be able to buy it. And that is a symbol of success, only “rich” “successful” people can allocate financial resources to non essentials.
And if you have a diamond worth $100,000 you want it to be appreciated and acknowledged if not openly at least secretly.
And this is the quandary of lab diamonds. They make earth found diamonds less special because more people can acquire a diamond that looks like a $100,000 one but only cost $10,000.
Diamonds are only worth something if two or more people want to possess them and will compete against each other with their financial resources to obtain them.

 

[freddyboston]

And this is the quandary of lab diamonds. They make earth found diamonds less special because more people can acquire a diamond that looks like a $100,000 one but only cost $10,000......

Actually......

Make that $1,000........

 

[Garry H (Cut Nut)]

The whole concept of jewellery and gems to adorn the body is an interesting one.
It has nothing to do with human basic needs like shelter, food, safety and community.
At some time in our evolution we decided that we liked useless but pretty things and enough of us felt the same way for there to be competition to fulfil the desire to obtain and/or adorn our bodies.
Things of great beauty and great rarity compel intense competition and so it’s the one with the most money who secures the prize. However being marooned on a desert island with the Crown Jewels would provide some awesome sparkles as you starved to death or fell foul of the elements or creatures whereas a decent knife would be of “more value” as it could save your life.
Most people know that if you have a big diamond you had enough money after fulfilling basic needs to be able to buy it. And that is a symbol of success, only “rich” “successful” people can allocate financial resources to non essentials.
And if you have a diamond worth $100,000 you want it to be appreciated and acknowledged if not openly at least secretly.
And this is the quandary of lab diamonds. They make earth found diamonds less special because more people can acquire a diamond that looks like a $100,000 one but only cost $10,000.
Diamonds are only worth something if two or more people want to possess them and will compete against each other with their financial resources to obtain them.

6,600 years ago. Not to mention shell necklaces from the stone age.

 

[Texas Leaguer]

Very emotional and cool view.
For me, describing diamonds in that manner is counter to my view- and experience.
The value of diamonds can fluctuate, but it doesn’t depreciate ..
A statement like that is either ill informed or purposely misleading.
The darn things depreciate the instant a consumer ( or dealer) buys one.
Dealers, in a perfect world can add enough value to ultimately make a profit- but even a dealer, strapped for cash that needs to sell- will suffer losses selling into the market.
The intrinsic value of natural diamonds will likely buoy the value over time.
Even now, natural brown diamonds are getting harder to find.
That bolsters the value of something traditionally bashed for most collectors/ diamond lovers.
That segment is probably a good example of what we may see as the rarity of mined diamonds versus man made stones becomes more accentuated.
Who knows.
As Yogi said- I’m excellent at predicting things- except if they are supposed to happen in the future ( or something like that)

In terms of his comment on depreciation, think the context was the longterm market as referenced by the Bain study. Another way to look at the concept is that it's better to buy today because it will cost more in the future (theoretically). Again, taking a longer term view. Certainly we have seen volatility in the market and a multi-year downturn recently.

Diamonds are not a good investment vehicle for people not in the business, mainly because there is not a structured secondary market with some level of predictability. But some people have done well despite the challenges.

In a very narrow view of value and appreciation/depreciation, historically the diamond market has been like the stock market in the sense that overall market value increases over long time horizons. That's why index funds are popular for long term investment.

But diamonds are also like individual stocks - if you don't buy the right one at the right price you might get jammed bigtime!

 

[Texas Leaguer]

A tiny sculpture made of mirrors!
Brilliant!
My darling wife wants me to actually make a round brilliant 50cm diameter out of plastic mirrors. I have tried using paid versions of ChatGPT and Claude and can not get the templates in CAD form to give to a laser cutting company to precisely shape for me. Any suggestions welcomed!

That sounds like an interesting project Garry. Keep us posted!

BTW the scupture quote was from our friend Jason Quick

 

[newtojewels]

6,600 years ago. Not to mention shell necklaces from the stone age.

As an aside, I saw this exhibit in person. It's in a lovely small museum on the Black Sea in Bulgaria and houses the oldest worked gold that has been found (around 13 lbs of it!). I was very moved by some of the pieces, I believe these beads are thought to be the oldest, from circa 4600-4700 BC.



Here's a Smithsonian article about it, it was found by happenstance: https://www.smithsonianmag.com/trav...thsonian-journeys-travel-quarterly-180958733/

A preview:

"The retired teacher told them a former student had uncovered the artifacts a few weeks earlier while digging trenches for electrical cables. After fishing a bracelet out of the bucket of his excavator, the young man gathered up a few more pieces. He assumed the jewelry was copper or brass, and tossed it in the box that came with his new work boots, then shoved it under his bed. Gold never crossed his mind. A few weeks went by before he gave the box of jewelry, still covered in dirt, to his old teacher.

Until that morning, all the known gold artifacts from the Copper Age weighed less than a pound—combined. In the shoebox alone, Minchev was holding more than double that. The initial find was 2.2 pounds, in the form of bracelets, a flat, rectangular breastplate, earrings, delicate tubes that might have fit around a scepter’s wooden handle, some rings, and other small trinkets."

 

[Garry H (Cut Nut)]

That sounds like an interesting project Garry. Keep us posted!

BTW the scupture quote was from our friend Jason Quick

He is a nice guy - and clearly a brilliant wordsmith

 

[Garry H (Cut Nut)]

Here is what Rapaport is listing - it appears the current market has bottomed out. So it might be a good time to blow away the moths out of those wallets

 

[AllAboardTheBlingTrain]

I think the Indian context explains some of the verbosity in that article (though it’s obviously a puff piece to promote diamonds). Lab grown diamonds here are considered the equivalent of fashion/travel jewellery for the most part. A lot of people would take the smaller natural over the bigger lab, or want the natural eventually alongside the lab. Many people would not buy labs openly or would pass them off as natural. Not sure how Gen-Zs think but I’ve been told a lot of lab jewellery sales are actually done to overseas customers.

The drive for transparency/certification has also squeezed many diamond retailers, but I don’t think that’s a bad thing personally because the unscrupulous ones have to change their tactics. But I would say that there has always been a large number of sellers who aren’t unscrupulous (even if they sell ungraded pieces they are priced appropriately and look approximately like the colour they should be, not way off, even when calibrated against a GIA stone of that grade). It is also increasingly more common that if you buy a stone > 1ct it will have a grading report (by GIA, HRD or IGI), and the pricing at retail is lower/comparable than US online retail (I use PS search engine for virtual stones as a price comparison). The biggest difference I remember seeing is about 10-12% between India in person retail and US online, for an apples to apples comparison (4Cs and grading body all match as much as possible).

I have resold in India and done fine, in part because the margins are low enough that if you wait and are patient and so can accept consignment, you can get a pretty good amount of your money or even recoup more than you paid depending on market prices. So it is a decent (though imperfect) store of value, but the returns you make are way lower than inflation, so you don’t make a real return.

Diamonds and gold are considered investments in India though because they were historically some of the only forms of allowable “women’s wealth”, or stridhan, which was a woman’s money and savings that could not be taken from her by her in laws. That’s why Indian women wear so much jewellery and why we collect so much gold.