Investment Quality Diamond?

[MissAva]

A poster mentioned that when her stone was cut that the cutter who did it was hesitant because the diamond was “investment quality”. I have recently read Paul’s article about the differences of what is expected from rough and what actually appears. Which made me wonder, how does a cutter label something investment quality before it is cut?

 

[Kaleigh]

Good question Mat!! I am curious to know the answer as well!!

 

[Dancing Fire]

are there such a thing as investment quality diamonds?

 

[Mara]

Date: 4/30/2006 11:10:19 PM
Author: Dancing Fire
are there such a thing as investment quality diamonds?

I wonder the same thing...

I find it intriguing that cutters did not want to cut rough because it was 'investment quality'. Wouldn't it be even smarter to cut a stone FROM investment quality kind of stock rough?? Because then possibly more $$ could be commanded?

However, I also find it interesting that someone who already sourced the rough and therefore it was already owned by someone, was having a problem finding a cutter to cut it for them. If the rough is already owned and they want to turn it into a stone, would cutters really turn that job down?? You think it'd be something that they would WANT to do.

 

[Dancing Fire]

what i don''t understand is.....why would any normal everyday people buy a uncut diamond.

too much risk involve.

 

[Garry H (Cut Nut)]

Back in the last resources boom - 1979 - 1980 - the Rapaort price for 1t D IF got to $36,000 because a lot of people thought there were such things as investment diamonds.

They were said to be so rare that they would go up in value.
Today they are worth 1/2 as much.

There is a relationship between top quality and low quality anything - and a market for the lot.

On Rap a 5ct D IF is 44 times the price of a M I3
A 1ct is 21 times
A 1/3rd ct differential is 15 times.

Those differentials dont change much over time (except when investment advisors con people into being stoopid).

So all diamonds are investment diamonds

Or none at all ever were

You choose.

I think diamonds are simply an investment in my se...... Oops, I mean relationship

 

[Dancing Fire]

Garry

do you think diamond price is tie to the price of precious metals ? gold and silver also top out in Jan 1980.precious metals has been strong in the last couple of yrs and so has diamond prices.

 

[Garry H (Cut Nut)]

Date: 5/1/2006 4:17:49 AM
Author: Dancing Fire
Garry

do you think diamond price is tie to the price of precious metals ? gold and silver also top out in Jan 1980.precious metals has been strong in the last couple of yrs and so has diamond prices.

The knee bone is conneted to the thigh bone......

Maybe, maybe not DF - but gold has gone up a lot more than diamonds - gold is an "investment" metal because the copst of selling and buying (spread) is small, and often investors can buy without owning physical gold - or buy futures / hedges etc.
Cant do thoise investment thingy''s with Ice

But ice is more fun than an ingot of gold

 

[Dancing Fire]

Date: 5/1/2006 4:32:34 AM
Author: Garry H (Cut Nut)

Date: 5/1/2006 4:17:49 AM
Author: Dancing Fire
Garry

do you think diamond price is tie to the price of precious metals ? gold and silver also top out in Jan 1980.precious metals has been strong in the last couple of yrs and so has diamond prices.

The knee bone is conneted to the thigh bone......

Maybe, maybe not DF - but gold has gone up a lot more than diamonds - gold is an ''investment'' metal because the copst of selling and buying (spread) is small, and often investors can buy without owning physical gold - or buy futures / hedges etc.
Cant do thoise investment thingy''s with Ice

But ice is more fun than an ingot of gold

Garry
can you sell me 100 diamond future contracts ?

 

[Garry H (Cut Nut)]

OK
What will you bid on 100 1ct F SI1''s with my preference for proportions and Medium Blue DF?

 

[strmrdr]

Date: 5/1/2006 6:15:34 AM
Author: Garry H (Cut Nut)
OK

What will you bid on 100 1ct F SI1''s with my preference for proportions and Medium Blue DF?

*looks in wallet*... I bid $1.37

 

[denverappraiser]

‘Investment Quality’ is one of those horrendous terms that should be banned from the industry. Industrial grit can have a better profit margin than D-flawless stones for the traders, it just trades in a different marketplace and not everyone is well suited to it. There’s no way to know either what the cutter was talking about or whether they are being accurately quoted because context is so terribly important but I’ll take a stab at it. Let’s assume that it means that it’s expected to produce a stone of unusually high color and clarity.

The more expensive the stone, the greater the liability to the cutter. Most won’t assume breakage risk but if an expensive stone breaks on the wheel, they probably won’t get paid for their work and they’re almost certain to lose a client over it. The cutters normally charge by weight for their services and this is only indirectly related to the final value. The effect is that they get the same money for more grief by cutting higher quality material. I’m not at all surprised that the cutter wasn’t enthusiastic.

Clients of the most expensive stones are pretty demanding folks. It’s unlikely that a client with an M I-1 is going to get upset over an AGS2 cut grade or that the yield is slightly less than expected unless this crosses over one of the critical weights. Actually, it’s unlikely that they’ll ever send it to a quality lab in the first place. What they want is weight. With the higher color/clarity combinations, these other areas start to become far more important. More work – Same money. Hmmm.

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

 

[princessv]

I thought that cutters usually won''t cut just one stone for one person?

Hypothetically speaking, how much does a cutter charge to cut a stone anyway for just one client?

 

[denverappraiser]

Not all cutters offer all of their services to all clients and not all charge the same prices. It''s kind of like asking how much a chef charges to prepare a steak. $250/carat with the occasional fee for examination, shipping or similar services seems to be sufficient for most. A few are a little bit cheaper and a few are quite a bit more. Many simply won''t accept private clients because they''re too much trouble or they feel it''s a conflict to be competing with their trade clients. Many jewelers and appraisers are prepared to broker this service.

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

 

[Paul-Antwerp]

Another problem in cutting or re-cutting for a consumer is recent anti-money-laundering-legislation. We now need to report any suspicious deal just like bankers, lawyers, and others.

When someone comes up with rough to cut or polished to re-cut, we need to be pretty sure that this person got hold of these diamonds in a legal way, and that the money that bought these diamonds, was earned in a legal way. If we fail to investigate that, we might be assisting in money-laundering or terrorist-financing, and any link to such activity is not only deadly for our business, but also for our personal well-being.

Therefore, it is our policy not to cut any rough diamonds, coming from a consumer, and if a consumer wants a re-cut, we want proof of the original purchase of the stone, and a background-check of the consumer. Politically, this is a very touchy subject these last months and years, and we cannot afford taking any risks in this.

Live long,

 

[Garry H (Cut Nut)]

Date: 5/1/2006 11:15:36 AM
Author: Paul-Antwerp
Another problem in cutting or re-cutting for a consumer is recent anti-money-laundering-legislation. We now need to report any suspicious deal just like bankers, lawyers, and others.

When someone comes up with rough to cut or polished to re-cut, we need to be pretty sure that this person got hold of these diamonds in a legal way, and that the money that bought these diamonds, was earned in a legal way. If we fail to investigate that, we might be assisting in money-laundering or terrorist-financing, and any link to such activity is not only deadly for our business, but also for our personal well-being.

Therefore, it is our policy not to cut any rough diamonds, coming from a consumer, and if a consumer wants a re-cut, we want proof of the original purchase of the stone, and a background-check of the consumer. Politically, this is a very touchy subject these last months and years, and we cannot afford taking any risks in this.

Live long,

A good explanation Paul of one of the unintended or unseen consequences of Conflict Diamonds issue and making west African nations safer places with better education and health systems paid for by export levies.

 

[perry]

Sorry to here that you would not cut a customers rough under any circumstances.

One of the interesting places in the US has "low production" diamond mine that is a state park because it does not have enough yield to be worth mining. Pay a small daily fee and go diamonond hunting for the day (buckets, shovels, etc provided with a short training class).

A couple of months ago someone came up with a about a 4 carat rough. I saw a clip on it on TV with a diamond industry person giving the information that it would probalby cut to about a 2 carat stone with a price value in the _____ to ______ range: assuming the color stayed about where it appeared to be and their were no major flaws.

Now admitedly, most people do not find anything - and most finds are on the order of 1/2 carart rough or less.... (this was litereally the find of the last 50 years).

But, here I was thinking that that place deserved at least a day or so of my 2 week vacation... (if not this year - in a future year).

And you would be one of the folks I would want to cut something like that if I won the one in a million lottory and found something big enough to cut.

So, in a case like that (well documented).... would you allow an exception?

Perry

 

[Dancing Fire]

Date: 5/1/2006 6:15:34 AM
Author: Garry H (Cut Nut)
OK
What will you bid on 100 1ct F SI1''s with my preference for proportions and Medium Blue DF?

$3800 per ct

i don''t know Garry

i''m not in the diamond business.

 

[Garry H (Cut Nut)]

Date: 5/1/2006 7:31:30 PM
Author: Dancing Fire

Date: 5/1/2006 6:15:34 AM
Author: Garry H (Cut Nut)
OK
What will you bid on 100 1ct F SI1''s with my preference for proportions and Medium Blue DF?

$3800 per ct

i don''t know Garry

i''m not in the diamond business.

$380,000 is bid.
Will anyone raise that offer or take DF''s contract?

 

[perry]

Unlike DF I don't have spare hundreds of thousands of dollars hanging arround: However, if I did - I think something in the $4500 range per stone ($450,000). To clarify: Round diamonds, not princess cut.

Perry

 

[Dancing Fire]

Date: 5/2/2006 4:57:26 PM
Author: perry
Unlike DF I don''t have spare hundreds of thousands of dollars hanging arround: However, if I did - I think something in the $4500 range per stone ($450,000). To clarify: Round diamonds, not princess cut.

Perry

Perry

very funny, i wish

i think you''re biding too high for a 100 stone lot

this is a futures contract.we don''t when Garry will deliver the goods

 

[perry]

DF:

I''m aware this is a futures contract. By the time a lot of 100 such diamonds were assembled I figure that the price would be very good. Unless you think that the price for RB''s is going to go down a lot. Hmm... You know something I don''t on diamond pricing?

Perry

 

[Dancing Fire]

Garry
how long before you can deliver the goods? Perry is waiting.

 

[WinkHPD]

Date: 5/1/2006 3:34:50 AM
Author: Garry H (Cut Nut)
Back in the last resources boom - 1979 - 1980 - the Rapaort price for 1t D IF got to $36,000 because a lot of people thought there were such things as investment diamonds.

Gary, just a small mistake on your pricing. In February of 1980 a one carat D-FLawless traded at the Diamond Dealers Club in New York, between dealers for $65,000 per carat. Shortly after that the bottom dropped out of the market, along with gold, silver and platinum.

Wink

 

[sumbride]

Date: 5/1/2006 7:01:45 PM
Author: perry

One of the interesting places in the US has ''low production'' diamond mine that is a state park because it does not have enough yield to be worth mining. Pay a small daily fee and go diamonond hunting for the day (buckets, shovels, etc provided with a short training class).

I''ve been there, and it is a lot of fun, but all I found was a piece of yellow jasper. This was almost 20 years ago, but I was sure I would find diamonds by the handful! alas... My parents live about 2 hours from Crater of Diamonds, so maybe I''ll go back someday. They do a good job at showing you what to look for, and they have people on staff that can identify what you find. It''s good fun.

 

[MissAva]

So if the term has no real defined meaning, why does it get used so often?

 

[WinkHPD]

Date: 5/4/2006 4:08:08 PM
Author: Matatora
So if the term has no real defined meaning, why does it get used so often?

I suspect the answer is salesmanship.

Wink

 

[Dancing Fire]

Date: 5/4/2006 10:25:55 AM
Author: Wink

Date: 5/1/2006 3:34:50 AM
Author: Garry H (Cut Nut)
Back in the last resources boom - 1979 - 1980 - the Rapaort price for 1t D IF got to $36,000 because a lot of people thought there were such things as investment diamonds.

Gary, just a small mistake on your pricing. In February of 1980 a one carat D-FLawless traded at the Diamond Dealers Club in New York, between dealers for $65,000 per carat. Shortly after that the bottom dropped out of the market, along with gold, silver and platinum.

Wink

Wink
yep.....that sounds more like what i heard.i heard it was $60k.

 

[Garry H (Cut Nut)]

Date: 5/4/2006 7:33:11 PM
Author: Dancing Fire

Date: 5/4/2006 10:25:55 AM
Author: Wink

Date: 5/1/2006 3:34:50 AM
Author: Garry H (Cut Nut)
Back in the last resources boom - 1979 - 1980 - the Rapaort price for 1t D IF got to $36,000 because a lot of people thought there were such things as investment diamonds.

Gary, just a small mistake on your pricing. In February of 1980 a one carat D-FLawless traded at the Diamond Dealers Club in New York, between dealers for $65,000 per carat. Shortly after that the bottom dropped out of the market, along with gold, silver and platinum.

Wink

Wink
yep.....that sounds more like what i heard.i heard it was $60k.

I think the maximum Rap price was still $36k as I remeber - and it is around 1/2 that today.

Perry i still dont see how i can make an investment yet - waiting for your offer to get somewhere near $18k per carat - then we can exchange contracts

 

[perry]

Garry:

And I'm waiting on how long it would take for you to assemble the necessary packet of 100 diamonds - without specifically cutting down larger stones (which is why you want that 18K).

Ah well. I suspect that we'll both have to wait a while.

At least DH can see that I could have indeed made a profit.

One other thought - I hate to see a good deal fall through because we could not get conventional financing: I note that a normal "Monopoly" game here in America has just over $18,000 in the set (I actually think its about $21,000 - but who wants to count all that cash...).

Would you accept 100 Monopoly games in trade for those 100 diamonds to the above spec's.

(I'm not sure if DH ever learned how to barter other goods and services - not a common practice in America).

Perry