OT: Diamonds = Rip-off??

[diagem]

Date: 4/19/2008 3:55:31 PM
Author: cectra79
I KNOW prices on diamonds are artificially inflated, hence the Diamonds law suit agains the de beers that was mentioned in one of the posts recently. I KNOW it because my husband works for a lawfirm involved in the suit. That being said, I''m in the market for a nice stone right now. As long as people buy dimonds, they are worth it.

Prices are not artificially anything...
They were controlled in the past..., and I know quite a few who actually miss these days (...and DeBeers are not these few...

)

The lawsuit or settlement was nothing except a symbolic "entry fee" into the largest consumer market "game" called the US of A!!!

If your husband works for the law-firm involved..., he should know very well that the law-firms are the "only" winners of this absurd and ridiculous situation!
Everybody was concern for the consumers..., yea right!!!

Wake up!!!

 

[WinkHPD]

Date: 4/19/2008 5:15:13 PM
Author: DiaGem

Date: 4/19/2008 3:55:31 PM
Author: cectra79
I KNOW prices on diamonds are artificially inflated, hence the Diamonds law suit agains the de beers that was mentioned in one of the posts recently. I KNOW it because my husband works for a lawfirm involved in the suit. That being said, I''m in the market for a nice stone right now. As long as people buy dimonds, they are worth it.

Prices are not artificially anything...
They were controlled in the past..., and I know quite a few who actually miss these days (...and DeBeers are not these few...

)

The lawsuit or settlement was nothing except a symbolic ''entry fee'' into the largest consumer market ''game'' called the US of A!!!

If your husband works for the law-firm involved..., he should know very well that the law-firms are the ''only'' winners of this absurd and ridiculous situation!
Everybody was concern for the consumers..., yea right!!!

Wake up!!!

Yikes, two times in one day that I agree with you, this world is changing...

I too feel that this was nothing more than a large payment to the government in exchange for them being allowed to enter into the country and to compete directly with those of us who have been selling their diamonds for the past many years.

I fear that the average consumer will get VERY little, if anything for the diamonds that they purchased during the years in question, as most of them will probably qualify for a pro rata share of less than $10, which is the cut off point for writing a check. The attorneys however will get their millions.

I sent a newsletter to my client list the other day and was surprised at how many of them have heard nothing about this, in spite of the $7,000,000 that DeBeers has spent to advertise the settlement as part of the settlement. Just shows how hard it is to make your voice heard in the advertising clutter of today''s markets.

For what it''s worth, I also feel that DeBeers is going to get a rude shock when they find out how hard it is to compete with the Internet and that the educational level of their clientèle is a LOT higher than they might be thinking it is.

Wink

P.S. Cool my spellchecker put a little mark over the e in clientele, I wish I knew how to do that! (Wink''s "Things that make him happy," department)

 

[WinkHPD]

P.S. By payment to the government I mean a payment to make the government look good, as if they actually cared about the average consumer.

 

[cectra79]

You are right about the essence of the law suit.
In my opinion, if you control the market’s supply holding back surpluses, you control the prices, thus making sure the stones sell at top $$. It’s not an artificial inflation? I guess it’s just me…

I didn’t mean to start an argument, and definitely didn’t mean to offend anybody. We’re all entitled to our own informed (or otherwise) opinions.

Thanks!

 

[diagem]

Back to the original request..., comments!

Date: 4/17/2008 10:43:11 PM
Author:vir0n
I finally made the dive aand bought the ERing. I paid what I budgeted and got pretty much what I wanted. It''s a custom setting so a couple weeks time will tell if a REALLY got what I wanted.

I can''t help by feel like, regardless of what I paid, I am getting ripped off. It just seems like the diamond/jewelery industry is just so tainted and manipulated it makes me wonder. Okay, so you can''t put a price on love and its symbols, blah blah. However, you can put a price on a diamond...are we honestly really getting something that is truly worth $XXXX dollars? Let''s face it, compared to how much they go for, diamonds cost next to nothing to pull out of the ground.

Comments?

Value..., how would you define this word in conjunction with Diamonds? Humm..., let see.

Historically..

Empires were born and existed because of them...
Royalty and nobles went crazy over them...
Countries went off to bloody wars over them...
Revolutions started and ended over them...
Love was ___________ over them...
Science depend on them...
People bought their lives and freedom with them...
Women and men melted over them...

I am sure there are plenty more reasons we can identify that would establish a value for Diamonds...

And..., as long as you can put millions and millions of any world currency/value in your tiny change pocket of your jeans and go...., means to me that the value of Diamonds is very personal to any ones specific needs!

Does this make sense?

 

[diagem]

Date: 4/19/2008 5:28:11 PM
Author: cectra79

You are right about the essence of the law suit.
In my opinion, if you control the market’s supply holding back surpluses, you control the prices, thus making sure the stones sell at top $$. It’s not an artificial inflation? I guess it’s just me…

I didn’t mean to start an argument, and definitely didn’t mean to offend anybody. We’re all entitled to our own informed (or otherwise) opinions.

Thanks!

Here is some info. for ya...

The only people who control the prices today are the rough Diamond buyers who travel the world like "chickens with no heads" offering the highest bids at rough tenders to put their hands on the precious and wanted material!

We..., the rough purchasers are setting the price..., its in our control!

 

[cectra79]

Dear DiaGem,

I''m glad you are so very important and control everything... LOL Like I said in my previous post, I didn''t mean to offend anybody and undermine one''s importance.

Thanks for the info... We learn something every day... I hope that strokes your ego enough?

 

[Lynn B]

I always kinda chuckle at these kind of posts... it's not the first and it won't be the last. A newbie comes into a diamond forum and announces that diamonds are (pick all that apply overpriced, over-valued, overrated, frivolous, shallow, vain, materialistic, yada yada yada.

Yeah, OK... whatever!

Everyone has their *thing(s)*... cars, boats, shoes, purses, watches, computers, electronics, musical instruments, thimbles, orchids... whatever. Personally, I may not think what you admire, enjoy or collect is particularly appealing, practical or even attractive... but hey, if floats your boat, so what? Who cares what I think?

Maybe I should go find a car forum and tell those folks there that I think their Mercedes, Porsches, Lexus's and whatever-else-they-have are overpriced and impractical!

 

[cectra79]

You guys, this is so unfair! I said I''m shopping for one right now, and as long as people are paying for the diamonds, they are worth it. When I mentioned the inflated prices, I echoed some other post. Just a piece of information. Didn''t realize only seasoned PSers are allowed to post their opinion.

Only because I''m new on the web-site doesn''t mean I''m new to diamonds. I haven''t bought on-line before, true, but...

So far I found everybody here very helpful, nice and knowledgeable... I''m surprised by such harsh dismissal...

Thanks.

 

[suchende]

I always kinda chuckle at these kind of posts... it''s not the first and it won''t be the last. A newbie comes into a diamond forum and announces that diamonds are (pick all that apply overpriced, over-valued, overrated, frivolous, shallow, vain, materialistic, yada yada yada.

I think part of the reason this happens specifically with diamonds is that a buyer (a man looking to become engaged) is sort of "forced" to buy a diamond for his girl, who thinks they are worth the price, when he certainly does not agree. If it were something the buyer agreed was worth it, like the things he''s already buying, it would never come up. I know my FH and I certainly don''t see eye-to-eye on the value of an e-ring!

 

[diagem]

Date: 4/19/2008 6:46:55 PM
Author: cectra79
Dear DiaGem,

I''m glad you are so very important and control everything... LOL Like I said in my previous post, I didn''t mean to offend anybody and undermine one''s importance.

Thanks for the info... We learn something every day... I hope that strokes your ego enough?

You never offend when you ask for information...
You do start to offend when you start to mock the information suppliers!

Its NOT about me personally (as you seem to understand it..., so I will be super nice and try to explain S L O W L Y!

your opinion from above: "...In my opinion, if you control the market’s supply holding back surpluses, you control the prices, thus making sure the stones sell at top $$. It’s not an artificial inflation?" is either proof that you didnt understand or you didnt read thorough enough!

Since DeBeers are NOT in control anymore... (their control went down from 80%+ to maybe 40% presently)..., so is their control in prices!
While huge rough producers came into the market (the reason for DeBeers loss of control)..., in the beginning they copied and used the DeBeers model to price their goods...., and the assumption was that DeBeers still call the shots on rough prices!

But something changed..., these relatively new rough producers discovered a way to market their goods and at the same time educated themselves of the true market prices!
That discovery is called tenders...., a type of auction which cutters and manufacturers travel the world and get a chance to study and offer on the rough Diamond materials..., so basically the cutters that are the most professional, efficient with the correct marketing models will offer the correct price for the rough they are trying to purchase! And the highest bid takes!

The new DeBeers paradox: after so many years of controlling the market they should be changing their Company slogan to:

"If you cant beat them, join them"

It seems (and all the recent signs show) that they..., the huge "DeBeers" are actually following suit and changing their model for pricing their goods based on these tenders!!!

Go figure!

 

[Imdanny]

Sigh. All I know is that the prices keep going up.

 

[diagem]

Date: 4/20/2008 2:22:46 AM
Author: Imdanny
Sigh. All I know is that the prices keep going up.

I guess there are more cutters out there competing on a limited quantity of Diamonds....

(especially in the high end bracket!)

 

[strmrdr]

Date: 4/20/2008 2:29:12 AM
Author: DiaGem

Date: 4/20/2008 2:22:46 AM
Author: Imdanny
Sigh. All I know is that the prices keep going up.

I guess there are more cutters out there competing on a limited quantity of Diamonds....

(especially in the high end bracket!)

or the supply they are going after is still being artificially limited.

 

[diagem]

Date: 4/20/2008 7:40:17 AM
Author: strmrdr

Date: 4/20/2008 2:29:12 AM
Author: DiaGem

Date: 4/20/2008 2:22:46 AM
Author: Imdanny
Sigh. All I know is that the prices keep going up.

I guess there are more cutters out there competing on a limited quantity of Diamonds....

(especially in the high end bracket!)

or the supply they are going after is still being artificially limited.

Could be..., but I personally dont believe so...
Storm..., remember the big players rough producers are public companies today...
And as we all witnessed DeBeers this year..., when they de-listed approx 25% of their sightholders and came out bluntly and said they dont have enough rough for the whole list as in the previous sight cycle! Its no secret that the DeBeers buffer-stock no longer exist since their privatization!

The only "very limited" speculation that might still be going on these days are some big polished Diamond companies holding off the marketing of some of the big size polished Diamonds...

 

[elmo]

Date: 4/19/2008 8:59:31 PM
Author: Lynn B
I always kinda chuckle at these kind of posts...a newbie comes into a diamond forum and announces that diamonds are...yada yada yada.

There's a word for this, "troll". So, virOn, you're a smart guy. What did you do to try to work against the system? For instance lots of folks here have figured out that lower colors and clarities look really good when cut well in a normal engagement ring size. Others are justifiably proud of their colored stone ERs. I see you set a budget and stuck to it. Good start. But instead of just complaining about it, why didn't you work with your girl and do something about it?

 

[Paul-Antwerp]

Date: 4/20/2008 7:40:17 AM
Author: strmrdr

Date: 4/20/2008 2:29:12 AM
Author: DiaGem

Date: 4/20/2008 2:22:46 AM
Author: Imdanny
Sigh. All I know is that the prices keep going up.

I guess there are more cutters out there competing on a limited quantity of Diamonds....

(especially in the high end bracket!)

or the supply they are going after is still being artificially limited.

I agree with Diagem that this supply is not artificially limited. But their could be another play going on.

If you see some rough at tenders, and the prices they are finally sold for, you see that a rough stone that could yield a 3Ct G or better, VS or better, will sell at the price of a polished 3Ct D-IF. This is not logical.

A possible explanation is that big diamond houses are concentrating on obtaining this rough, and abiding time for prices to go up, and sell it later. As long as prices rise faster than the cost of financing, this is beneficial. In the end, the fight in these big stones might well be one for market-share first, and profits later.

Live long,

 

[strmrdr]

Date: 4/20/2008 12:02:41 PM
Author: Paul-Antwerp
I agree with Diagem that this supply is not artificially limited. But their could be another play going on.

If you see some rough at tenders, and the prices they are finally sold for, you see that a rough stone that could yield a 3Ct G or better, VS or better, will sell at the price of a polished 3Ct D-IF. This is not logical.

A possible explanation is that big diamond houses are concentrating on obtaining this rough, and abiding time for prices to go up, and sell it later. As long as prices rise faster than the cost of financing, this is beneficial. In the end, the fight in these big stones might well be one for market-share first, and profits later.

Live long,

I was just going too say that under the new system it wouldnt have too be the mining companies that are doing it one or more of the large cutting houses could do it in some areas of the market.

 

[diagem]

Date: 4/20/2008 1:54:25 PM
Author: strmrdr

Date: 4/20/2008 12:02:41 PM
Author: Paul-Antwerp
I agree with Diagem that this supply is not artificially limited. But their could be another play going on.

If you see some rough at tenders, and the prices they are finally sold for, you see that a rough stone that could yield a 3Ct G or better, VS or better, will sell at the price of a polished 3Ct D-IF. This is not logical.

A possible explanation is that big diamond houses are concentrating on obtaining this rough, and abiding time for prices to go up, and sell it later. As long as prices rise faster than the cost of financing, this is beneficial. In the end, the fight in these big stones might well be one for market-share first, and profits later.

Live long,

I was just going too say that under the new system it wouldnt have too be the mining companies that are doing it one or more of the large cutting houses could do it in some areas of the market.

Could be some kind of speculation going on..., as there always is and was (and is legit and not illegal)..., but it is still far - far away from a DeBeers type of controlled market or "monopoly" as it was in the past!

One thing I can promise..., members of this industry were never "famous" for unifying themselves for a specific cause! Even for the right causes that needed unification...

 

[strmrdr]

Date: 4/20/2008 2:22:42 PM
Author: DiaGem
Could be some kind of speculation going on..., as there always is and was (and is legit and not illegal)..., but it is still far - far away from a DeBeers type of controlled market or ''monopoly'' as it was in the past!

One thing I can promise..., members of this industry were never ''famous'' for unifying themselves for a specific cause! Even for the right causes that needed unification...

maybe they are taking lessons from the tanzanite cartel.
could even be the same people.

 

[diagem]

Date: 4/20/2008 2:37:29 PM
Author: strmrdr

Date: 4/20/2008 2:22:42 PM
Author: DiaGem
Could be some kind of speculation going on..., as there always is and was (and is legit and not illegal)..., but it is still far - far away from a DeBeers type of controlled market or ''monopoly'' as it was in the past!

One thing I can promise..., members of this industry were never ''famous'' for unifying themselves for a specific cause! Even for the right causes that needed unification...

maybe they are taking lessons from the tanzanite cartel.
could even be the same people.

 

[strmrdr]

Date: 4/20/2008 2:42:00 PM
Author: DiaGem

Date: 4/20/2008 2:37:29 PM
Author: strmrdr

maybe they are taking lessons from the tanzanite cartel.
could even be the same people.

First they laugh then I win :}
If you think about it DeBeers started out this way, buying up rough from other producers.
So there is a history of it happening.

 

[diagem]

Date: 4/20/2008 2:50:24 PM
Author: strmrdr

Date: 4/20/2008 2:42:00 PM
Author: DiaGem

Date: 4/20/2008 2:37:29 PM
Author: strmrdr

maybe they are taking lessons from the tanzanite cartel.
could even be the same people.

First they laugh then I win :}
If you think about it DeBeers started out this way, buying up rough from other producers.
So there is a history of it happening.

Not quite..., first they bought the mines..., then they got the power..., and then they bought up the rough from other producers...

ask Barney Barnato...: http://en.wikipedia.org/wiki/Barney_Barnato

 

[strmrdr]

Date: 4/20/2008 3:07:07 PM
Author: DiaGem
Not quite..., first they bought the mines..., then they got the power..., and then they bought up the rough from other producers...

ask Barney Barnato...: http://en.wikipedia.org/wiki/Barney_Barnato

buying up the production and becoming the middle man is what let them do it.
It was the keystone of the whole operation.

 

[diagem]

Date: 4/20/2008 3:32:03 PM
Author: strmrdr

Date: 4/20/2008 3:07:07 PM
Author: DiaGem
Not quite..., first they bought the mines..., then they got the power..., and then they bought up the rough from other producers...

ask Barney Barnato...: http://en.wikipedia.org/wiki/Barney_Barnato

buying up the production and becoming the middle man is what let them do it.
It was the keystone of the whole operation.

???

 

[strmrdr]

Date: 4/20/2008 3:35:09 PM
Author: DiaGem

Date: 4/20/2008 3:32:03 PM
Author: strmrdr

buying up the production and becoming the middle man is what let them do it.
It was the keystone of the whole operation.

???

they became the middle man between the cutters and the mine owners then used that money too buy out the mine owners too become both the middle man and the mine owner.

 

[niceice]

I don''t want to come across as if I''m attacking vir0n, but I''m going to answer this as if we were sitting across from each other drinking a beer and just talking about the concept... those who know me well, know that I''m a bit sarcastic in humor. That said:

Date: 4/17/2008 10:43:11 PM
Author:vir0n
Let''s face it, compared to how much they go for, diamonds cost next to nothing to pull out of the ground.

Really? Well then the DTC must be going about it all wrong because according to their 2006 financial report they spent $287 Million on exploration, research and development! And that is just to figure out where to "dig"

If you''re right vir0n, then the people over at the DTC are Dee Dee Dee''s! Looks like they spent another $37M "retrenching" existing shafts, must be using a diamond studded shovel.

So how much profit did you really pay for the eRing that you purchased? Unless you purchased a three or four carat of high quality, I''m guessing that the profit wouldn''t cover the cost of a round trip plane ticket to South Africa. Then there is the cost of lodging, the cost of the mining permit, the cost of a guide, probably a security force, travel expenses for the crew, uh, the cost of a shovel, a bucket, a siv, oh, and a whole lot of sunscreen! Yea, sunscreen is a MUST. And then you''ve got to figure out what is a ROCK and what is a DIAMOND. Let''s say you make it out of the diamond bearing regions of South Africa alive, there''s a stretch, then you''ve got to figure out how to whittle down that puppy into something that resembles the icon that appears with my post, I''ve never cut a diamond myself, but I hear that it''s a dirty job "that probably costs next to nothing to do"

Perhaps Paul or DiaGem would like to comment on the cost of their equipment? Wait, what size diamond did you buy vir0n? Let''s say it was a one carat, do you realize that it was probably cut from a piece of diamond rough that started out as a 2.00 - 2.25 carat or more? It''s laying on the floor, so to speak.

If the climate in South Africa, political or thermal, is not to your personal taste, you might try looking for diamonds in Canada or Russia. I hear that the ice pack is beginning to melt, let''s see you''re going to need... Oh, you get it, right? I''m being sarcastic, but it seems to me that people never really stop to think about the expense that goes into "pulling a diamond out of the ground". Perhaps it is because the media always seems to focus on alluvial miners who are usually not affiliated with the professional mining operations, have you ever noticed how the diamond rough featured in these media explorations is always tiny? The independent miners who are literally trying to pull diamonds out of the ground are fortunate to ever find anything substantial in their lifetimes, it''s a lifestyle not unlike the U.S. Goldrush of 1849, a few people "struck it rich" and a lot more worked their fingers to the bone trying to catch the dream.

The DTC "settlement" - according to Idex, as of Friday the law firms involved in the case are expected to receive $74M for their part in saving America from the evils of the diamond industry... Consumers who filed claims are expected to receive an average of $16 in the form of a settlement and the court determined that De Beers might have charged 4% more than what might be considered to be an appropriate mark-up.

 

[vir0n]

I apologize in advance for bringing the topic back up again or kicking a dead horse for that matter.

I just quickly wanted to thank everyone for the good discussion, clarification, and interesting opinions. You guys know your stuff when it comes to diamonds, no doubt about that. I can see where there is some value in diamonds...some of it being historical, significance, some of it being in terms of $$$, some industrial, etc.

To a couple of those who felt it necessary to comment on my relationship: not appreciated.

 

[zerj]

Date: 4/19/2008 4:20:16 PM
Author: Paul-Antwerp

Date: 4/19/2008 3:55:31 PM
Author: cectra79
I KNOW prices on diamonds are artificially inflated, hence the Diamonds law suit agains the de beers that was mentioned in one of the posts recently. I KNOW it because my husband works for a lawfirm involved in the suit. That being said, I''m in the market for a nice stone right now. As long as people buy dimonds, they are worth it.

Correction: the lawsuit covers a period from 1994 through 2006, and is not talking about the current situation. And the experts in the lawsuit have calculated this artificial inflation at an overcharge by De Beers'' of 4.85% over that period.

For De Beers'', on its total sales, that is a huge amount of money. For a consumer, having bought a stone for 5,000 USD, in which say 50% accounts for the mark-up of the retailer and the added value of the cutting-distribution channel, the actual overcharge is 4.85% of 2,500, being just over 100 USD.

Live long,

I''m not trying to argue the value of diamonds, I''m just anal when it comes to math.

Wouldn''t an overcharge from the wholesaler result in a 10% increase to the end consumer in your example? If a retailer is working on a fixed markup (100% in your example) he would also be marking up the overcharge. Wouldn''t that make it an overcharge of 200 USD?

Or am I misunderstanding the lawsuit?