Rappaport to start online diamond auction

[Nicrez]

Has anyone seen this news from Rappaport? Curious to know what the buyers think:


I am writing to you about a major new Rapaport initiative that will significantly increase diamond price transparency and provide trading opportunities for everyone in our industry.

Beginning September 17-20, 2007 we will hold monthly Rapaport Guaranteed and Certified Diamond Auctions. The transaction prices realized at auction will be published on the internet providing a series of accurate and consistent transaction price information for the first time in history.

The transactions prices will be based on GIA graded round diamonds selected and guaranteed by Rapaport to ensure consistent quality. They will be Round, 1.01 and larger, D-K, IF-VS2, X-VG.

The terms of sale will be consistent: Spot Cash, FOB, New York

I believe that it is vital for every member of the diamond industry to have an equal opportunity to participate in the auctions, which will ensure fair, honest, open, efficient and competitive diamond prices.

Everyone is invited to either submit their diamonds for sale, or buy diamonds. The only qualifications are that the diamonds pass our careful inspection and participants comply with the U.S. Patriot Act requirements.
Information on participating is provided below.

I take this opportunity to assure all of our friends that the auctions and the transaction prices they generate will be established and managed in a responsible and fair manner ensuring equal opportunity for all.

Yours truly,

Martin Rapaport

 

[JohnQuixote]

I was curious about the same thing Nicrez: Rapaport to launch diamond futures market

There was a bit of discussion in that thread but I'm still interested in reactions; even from non-trade members (this is currently limited to trade members and financial institutions) and especially from those with long-term market experience.

 

[whatmeworry]

Sounds like a good thing overall. There will be a lot of serious implications if it is successful

It will make the wholesale prices of diamonds more transparent and will affect retail prices.
May open up more avenues for consumers to sell their diamonds at close to wholesale prices.
May standardize lab grading since GIA grading is the benchmark.
If GIA certs are the benchmark for easy trading, what will happen to the other labs?

 

[Nicrez]

Thanks John...I figured someone would have created a thread like this already, but I couldn''t find it...

Whatmeworry, I don''t think the public will be selling via this market. From what I read, it''s trade only. I hate to admit this, but if they allowed the public, there would be so much business lost to dealers because their profit margins would go up based on not having the low cost inventory and mark-up. Meaning average joe gets fleeced for a diamond at 40% of value and it''s resold for 100% of market value. Granted being resold several times from dealer to dealer it will not be just one guy getting the profit, but you get the picture.

Also, there are specific rules and practices in the trade that if you have non-industry people selling and buying, you effectively kill retail stores (more so than online) and you may have E-Bay like issues. Anonymous sellers will appear, and payment complications can occur. Sure it can happen in the industry, but the chances are MUCH slimmer, as they are all connected by reputation and references. I can''t tell you how many times people will not sell to you unless you furnish references. It''s a fairly small community and heavily guarded by reputation. You can fleece people, but not for long. And then your business is under and you have no clients.

GIA is the only standardized and statistically secure lab at the moment regarding pricing and grading. Doesn''t mean that in a few years it should not be inclusive of other labs, but the only fair way to eventually set a system of this nature is to have the grading system controlled by a non-artisan government entity. Something where the criteria it uses to auction is determined and graded by such a controlled entity and all other grading (quality and various other subjective issues) can be graded by various labs.

If GIA can''t get it right, imagine the government...

 

[denverappraiser]

Consumers can participate through their local jeweler or other broker who does the logistics for them. By using the auction format, they get a mostly guaranteed date of sale, which is the classic problem with typical consignment deals, and the dealers have a much more finite amount of work and risks required in order to process the deal so they can more easily set competitive prices for their services. This is all good news for resale consumers who have the appropriate kinds of merchandise.

There still will be a reality check problem between what consumers think their stuff ought to bring and what they can really get but I think the bit of transparency that this adds will make this far more clear to people.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Jewelry Appraisals in Denver

 

[Nicrez]

Date: 8/30/2007 3:46:41 PM
Author: denverappraiser
Consumers can participate through their local jeweler or other broker who does the logistics for them. By using the auction format, they get a mostly guaranteed date of sale, which is the classic problem with typical consignment deals, and the dealers have a much more finite amount of work and risks required in order to process the deal so they can more easily set competitive prices for their services. This is all good news for resale consumers who have the appropriate kinds of merchandise.

There still will be a reality check problem between what consumers think their stuff ought to bring and what they can really get but I think the bit of transparency that this adds will make this far more clear to people.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Jewelry Appraisals in Denver

I would say that a diamond that is bought at retail price will almost NEVER get close to that in wholesale, no matter how nice the vendor is to the consignee. However, I would venture to say that many people who purchase online are getting very close to the wholesalers margins, and if they tried to consign a stone (and not a whole ring), they may get a decently close price to 70% of what was paid.

But even when you buy well, and try to sell well, you have the issue of favorite shapes, like trying to sell your very popular marquise in this day and age... or perhaps a decent cut RB, which now would have to be recut and reduced in price to get a decent price. It's just too variable for people to really rely on a jewler or shop to consign and make a decent profit.

Wholesale wise I see this no different I suppose than Rapnet or Idex, but I suppose that it's more transparent, than taking the time to price things out. My friend calls it the E-Bay of wholesale jewelry, which is a fair comparison. I can name several times I would look up something on E-Bay to get a fair market value for it. But didn't you notice that sometimes things were underpriced? Based on supply and demand, the same item can be higher or lower priced, so I don't see that good for anything more than the short term (Rap Sheet) kind of transactions.

Isn't this what the Rap sheet is for?

 

[denverappraiser]

Nicrez,

I certainly agree that customers who expect to sell things for retail prices are going to be disappointed but there is a very real problem with customers who have things they no longer want, for example through an inheritance, who have a very difficult time selling at ANY price without getting ripped off. They end up selling in pawnshops, local estate liquidators and other ‘services’ where the fees to the dealer can be huge, sometimes as much as 90% or more.

The difference between the new auction format an Rapnet is that this attaches a date to the sale. On Rapnet, dealers list whatever they want and ask whatever prices they choose. Buyers either buy it or not as they wish. An overpriced or otherwise unsaleable item will simply languish there until the seller gets tired of listing it and changes the deal, until the market changes or until they simply get lucky. This is actually one of the problems for appraisers looking at Rapnet and the like to get comparable values. Asking a lot of money for a stone is not the same as getting it after all and Rap doesn’t really care what you list or what your asking price is.

With an auction this is far less likely to occur. For starters they are very specific about what is an acceptable listing. Each stone will have a seller set reserve price associated with it but I think Rap will require that these prices be grounded to some reality in order to insure that a significant number of the items actually sell. If most things don’t make the reserve and go unsold it makes the auction house look bad and their whole system will collapse for lack of interest from buyers. A dealer can theoretically keep listing the same bad offer but eventually Rap is going to simply refuse the listing as being a waste of their time.

Ebay comps are a huge problem. The descriptions are seller written and there is no way of knowing the accuracy, there are variables like the seller feedback and policies that have a tremendous affect on the sales value, There’s no way to know if the deal was paid for, if merchandise was actually delivered, if it was as described, if it was returned or really if it even existed n the first place. I would strongly recommend against using ebay data as a basis for a fair market value estimation.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Jewelry Appraisals in Denver

 

[diagem]

Date: 8/30/2007 3:34:18 PM
Author: Nicrez
Thanks John...I figured someone would have created a thread like this already, but I couldn''t find it...

Whatmeworry, I don''t think the public will be selling via this market. From what I read, it''s trade only. I hate to admit this, but if they allowed the public, there would be so much business lost to dealers because their profit margins would go up based on not having the low cost inventory and mark-up. Meaning average joe gets fleeced for a diamond at 40% of value and it''s resold for 100% of market value. Granted being resold several times from dealer to dealer it will not be just one guy getting the profit, but you get the picture.

Nicrez, do you always believe what you read?
The public will easily be able to buy and sell these Auctioned round shaped Diamonds..., Just as Neil mentioned above:

"...Consumers can participate through their local jeweler or other broker who does the logistics for them..."



Also, there are specific rules and practices in the trade that if you have non-industry people selling and buying, you effectively kill retail stores (more so than online) and you may have E-Bay like issues. Anonymous sellers will appear, and payment complications can occur. Sure it can happen in the industry, but the chances are MUCH slimmer, as they are all connected by reputation and references. I can''t tell you how many times people will not sell to you unless you furnish references. It''s a fairly small community and heavily guarded by reputation. You can fleece people, but not for long. And then your business is under and you have no clients.

GIA is the only standardized and statistically secure lab at the moment regarding pricing and grading. Doesn''t mean that in a few years it should not be inclusive of other labs, but the only fair way to eventually set a system of this nature is to have the grading system controlled by a non-artisan government entity. Something where the criteria it uses to auction is determined and graded by such a controlled entity and all other grading (quality and various other subjective issues) can be graded by various labs.

If GIA can''t get it right, imagine the government...

But this auction will have in my opinion have great child-birth pain prior to this baby being brought out in to this world...., it would be interesting to watch...
After-all..., Rapaport is a stubborn type of guy!!!

 

[diagem]

Date: 8/30/2007 4:28:54 PM
Author: denverappraiser
Nicrez,

I certainly agree that customers who expect to sell things for retail prices are going to be disappointed but there is a very real problem with customers who have things they no longer want, for example through an inheritance, who have a very difficult time selling at ANY price without getting ripped off. They end up selling in pawnshops, local estate liquidators and other ‘services’ where the fees to the dealer can be huge, sometimes as much as 90% or more.

The difference between the new auction format an Rapnet is that this attaches a date to the sale. On Rapnet, dealers list whatever they want and ask whatever prices they choose. Buyers either buy it or not as they wish. An overpriced or otherwise unsaleable item will simply languish there until the seller gets tired of listing it and changes the deal, until the market changes or until they simply get lucky. This is actually one of the problems for appraisers looking at Rapnet and the like to get comparable values. Asking a lot of money for a stone is not the same as getting it after all and Rap doesn’t really care what you list or what your asking price is.
True..., and Idex acts as a database only..., transaction prices are negotiated and sealed behind the scenes between the dealers themselves.

With an auction this is far less likely to occur. For starters they are very specific about what is an acceptable listing. Each stone will have a seller set reserve price associated with it but I think Rap will require that these prices be grounded to some reality in order to insure that a significant number of the items actually sell. If most things don’t make the reserve and go unsold it makes the auction house look bad and their whole system will collapse for lack of interest from buyers. A dealer can theoretically keep listing the same bad offer but eventually Rap is going to simply refuse the listing as being a waste of their time.

That does not make sense Neil (did you read it somewhere?)..., transparency occurs only when you let the natural price "wind" flow with no obstructions or strings attached..., the highest bid takes (period). While everybody can see!!!


Ebay comps are a huge problem. The descriptions are seller written and there is no way of knowing the accuracy, there are variables like the seller feedback and policies that have a tremendous affect on the sales value, There’s no way to know if the deal was paid for, if merchandise was actually delivered, if it was as described, if it was returned or really if it even existed n the first place. I would strongly recommend against using ebay data as a basis for a fair market value estimation.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Jewelry Appraisals in Denver

I think it is still early to tell....
It sounds like everyone looses (except Rapaport of-course...)
Consumers will have to pay more (I think), while margins will shrink (I am sure)!!!

I wonder how PS vendors visualize it as a retailers perspective??? Would be as interesting to hear as from non-trade members

I am hopping they will chime in....

 

[diagem]

Date: 8/30/2007 5:36:21 PM
Author: DiaGem

Date: 8/30/2007 4:28:54 PM
Author: denverappraiser

With an auction this is far less likely to occur. For starters they are very specific about what is an acceptable listing. Each stone will have a seller set reserve price associated with it but I think Rap will require that these prices be grounded to some reality in order to insure that a significant number of the items actually sell. If most things don’t make the reserve and go unsold it makes the auction house look bad and their whole system will collapse for lack of interest from buyers. A dealer can theoretically keep listing the same bad offer but eventually Rap is going to simply refuse the listing as being a waste of their time.

That does not make sense Neil (did you read it somewhere?)..., transparency occurs only when you let the natural price ''wind'' flow with no obstructions or strings attached..., the highest bid takes (period). While everybody can see!!!

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Jewelry Appraisals in Denver

From Rapaport''s letter to trade members...

"...The only qualifications are that the diamonds pass our careful inspection and participants comply with the U.S. Patriot Act requirements."

I didnt think "a reserve price" will be considered!!!

 

[diagem]

Date: 8/30/2007 6:02:21 PM
Author: DiaGem

Date: 8/30/2007 5:36:21 PM
Author: DiaGem

Date: 8/30/2007 4:28:54 PM
Author: denverappraiser

With an auction this is far less likely to occur. For starters they are very specific about what is an acceptable listing. Each stone will have a seller set reserve price associated with it but I think Rap will require that these prices be grounded to some reality in order to insure that a significant number of the items actually sell. If most things don’t make the reserve and go unsold it makes the auction house look bad and their whole system will collapse for lack of interest from buyers. A dealer can theoretically keep listing the same bad offer but eventually Rap is going to simply refuse the listing as being a waste of their time.

That does not make sense Neil (did you read it somewhere?)..., transparency occurs only when you let the natural price ''wind'' flow with no obstructions or strings attached..., the highest bid takes (period). While everybody can see!!!

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Jewelry Appraisals in Denver

From Rapaport''s letter to trade members...

''...The only qualifications are that the diamonds pass our careful inspection and participants comply with the U.S. Patriot Act requirements.''

I didnt think ''a reserve price'' will be considered!!!

I just read the "buyers info kit"... and you were right Neil....

It further says: "

"... Reserve Prices …. Each item has a reserve price which will not be disclosed."

Takes the transparency and comoditization out of it..., dont you think????

Something is up with Rapaport???

 

[denverappraiser]

Reserve prices are a necessary and reasonable precaution to get sellers to participate and almost all auction houses do it. No, I don’t think it’s a problem. For a long term stable marketplace to exist, both buyers and sellers must go away happy, or at least happy enough to come back and do it again later. If the sellers are unhappy they stop bringing things to sell, which means buyers have nothing to buy, they go home empty handed and they don’t come back next time. If buyers are unhappy they simply don’t buy and the whole thing grinds to a halt. Either way the house loses. It’s a delicate balance. It may make more sense if you bear in mind that the auction house, in this case Rapaport Group, is working for the sellers not the buyers.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Jewelry Appraisals in Denver

 

[denverappraiser]

Well, the auction ended yesterday. Here are the results.

Auction Results September 20 2007

It looks like only about 25/210 of them actually exceeded the reserve and sold. So much for my theory that the reserves will be set so that most will end in a sale. Quite a few of the bids that were refused generally look pretty reasonable. Realistic buyers and overly optimistic sellers isn’t going to make for a very interesting auction if they don’t address it for next time. I suppose it is pretty easy and it’s free to list a stone so even a 10% chance of a sale is still enough get takers on that side but buyers who are seriously interested in a particular stone are going to find a 1 out of 10 chance of a high bid actually getting it to be pretty discouraging. Highly automated buyers will have no great problem with it but I expect that humans will get quickly frustrated with it and choose to do their shopping elsewhere.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[Garry H (Cut Nut)]

Good assesment Neil. I counted 27 sales out of 210. I had some bids that should have been sales, but they did not meet the reserve.

I tried to participate, and unlike most buyers I was able to "virtually see" the diamonds because I could convert the stones Sarin files into DiamCalc images. There were not many stones that would have impressed Pricescopers, but there were not many real dogs either.

It will have set Rap Corp back about +6 months on the plan to establish a futures market.

 

[diagem]

Date: 8/30/2007 5:12:50 PM
Author: DiaGem

But this auction will have in my opinion have great child-birth pain prior to this baby being brought out in to this world...., it would be interesting to watch...
After-all..., Rapaport is a stubborn type of guy!!!

 

[diagem]

Date: 9/21/2007 9:56:56 AM
Author: Garry H (Cut Nut)
Good assesment Neil. I counted 27 sales out of 210. I had some bids that should have been sales, but they did not meet the reserve.

I tried to participate, and unlike most buyers I was able to ''virtually see'' the diamonds because I could convert the stones Sarin files into DiamCalc images. There were not many stones that would have impressed Pricescopers, but there were not many real dogs either.

It will have set Rap Corp back about +6 months on the plan to establish a futures market.

Could be prices are moving up?

 

[oldminer]

The diamonds will all be round shapes, and nearly all will be close to 1 carat in weight (for now). Just with this data, the entire market from 1/2 to 3 carat can be sort of "measured". It will provide everyone with better transaction information than the current Rap Sheet. It may allow some consumers who wish to seel a diamond which fits these narrow parameters a good way out.

Most people won''t be affected by the auction as it is initially rolled out. I suppose there is some fear that diamonds might become more open to everyone, like real estate. I can''t see how that will happen, but stranger things have happened already.

 

[diagem]

Date: 9/21/2007 3:04:04 PM
Author: oldminer
The diamonds will all be round shapes, and nearly all will be close to 1 carat in weight (for now). Just with this data, the entire market from 1/2 to 3 carat can be sort of ''measured''. It will provide everyone with better transaction information than the current Rap Sheet. It may allow some consumers who wish to seel a diamond which fits these narrow parameters a good way out.

Most people won''t be affected by the auction as it is initially rolled out. I suppose there is some fear that diamonds might become more open to everyone, like real estate. I can''t see how that will happen, but stranger things have happened already.

How?

 

[oldminer]

If 1.01ct E-VVS2 brings $x,xxx p/c then similar diamonds of this size will bring similar prices, probably. The market for other diamonds is perceived to be set by the prices obtained on 1 carat diamonds. If you can use an excel spreadsheet one can turn out a series of formulae to pretty much describe the remainder of the common sizes in the market, 1/2 to 3 carat. I used to do very much the same with old European cut diamonds. I published buy-sell prices for over 20 years which were distributed worldwide. I didn''t have every diamond, but I had a good clue as to how to adjust from what I knew and was actively dealing in. I used excel and formulas to get the tables I published filled in from .01ct to 5.99ct. Way smarter fellows are involved with Rapaport. they can do wonders with math and formulas.

 

[denverappraiser]

Date: 9/21/2007 3:04:04 PM
Author: oldminer
It will provide everyone with better transaction information than the current Rap Sheet.

I’m not so sure it does, at least not with this one. There’s a critical piece of information missing for analyzing the data, namely the amount of the reserves.

The Rap sheet is, presumably, based on the asking prices by some pool of sellers but there’s always something of a concern that asking a certain price isn’t the same as getting it. This can be a problem with analyzing Pricescope data as well but in this auction, we don’t even know what the asking price was on 87% of the items, only that they didn’t get it and that it exceeded some threshold.

It needs some work but there are some smart people over at Rap that aren’t afraid to work and I’m confident that they’re hard at it as we sit around and deconstruct it. Calling it a 6 month setback seems harsh but I would be very surprised if they count this as having been especially successful.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Jewelry Appraisals in Denver

 

[strmrdr]

hmm taking the ones that sold and comparing them to PS price search shows a 1k to 2k profit potential.
Somewhere around 20% profit potential which is above the low end PS search markup of 8%-10%
So getting 10% under wholesale is pretty pathetic.
Sounds like they just attracted people looking for bargains.

 

[diagem]

Date: 9/21/2007 3:37:23 PM
Author: oldminer
If 1.01ct E-VVS2 brings $x,xxx p/c then similar diamonds of this size will bring similar prices, probably. The market for other diamonds is perceived to be set by the prices obtained on 1 carat diamonds. If you can use an excel spreadsheet one can turn out a series of formulae to pretty much describe the remainder of the common sizes in the market, 1/2 to 3 carat. I used to do very much the same with old European cut diamonds. I published buy-sell prices for over 20 years which were distributed worldwide. I didn''t have every diamond, but I had a good clue as to how to adjust from what I knew and was actively dealing in. I used excel and formulas to get the tables I published filled in from .01ct to 5.99ct. Way smarter fellows are involved with Rapaport. they can do wonders with math and formulas.

The prices of other Diamond "sizes"?
I dont agree!!! Especially these last few years.

I would agree with you that twenty years ago (or actually up to about 6-7 years ago) you could have pointed out a "common sense" in valuing oec''s... (or any Diamonds, small or large), but I bet your range of prices are way out of reality these days.

Back in history there was a type of formula used in regards to estimating value on a weight vs. weight vs. quality basis..., Jean Baptiste Tavernier wrote "his own formula" in his Travels in India. And I must admit..., when I first read it..., I was surprised at the healthy common sense he had 400 years ago.

But these days seem becoming different..., I wrote a long time ago that (in my opinion) Rap-sheet is becoming less relevant from year to year..., yes, dealers are still using his #''s as a starting point for some type of guidance, but in the larger sizes his numbers are starting to mean less and less!
Some dealers are so lost cause the only fashion they got use buying Diamonds is through using the RapSheet..., today many of them are getting lost in their purchasing attempts.

Dave, I think and strongly believe setting value on Diamonds reminds me how we valued Diamonds back in the old days, sure fine cut rounds of 2 grainers to "about" three carats are still calculated in a most simple fashion...., but fancies have their own rules and it dominates now!

Yes, Martin is a extremely smart guy..., but I dont think he has the power anymore..., he is trying his best to stay on top of the "simple" round prices as we can see his attempt to commoditize "ROUND" Diamonds from 4 grainers to (maybe) three caraters. Yes, I know he is aiming for a wider range..., but lets see him hack this one first...

The laws of rough Diamonds have their own sets of (individual) rules..., rough producers are calling the shots these past and upcoming years when setting a price is concerned..., and DeBeers are not there to control the prices anymore.

 

[diagem]

Date: 9/21/2007 4:02:16 PM
Author: strmrdr
hmm taking the ones that sold and comparing them to PS price search shows a 1k to 2k profit potential.
Somewhere around 20% profit potential which is above the low end PS search markup of 8%-10%
So getting 10% under wholesale is pretty pathetic.
Sounds like they just attracted people looking for bargains.

It actually shows me dealers are not letting go easily...
Garry doesnt strike me as an individual "looking for bargains"...

, after all he did say "I had some bids that should have been sales,..."

 

[denverappraiser]

Careful Storm, as Garry points out, few of the stones are the sorts of things that would do well here and so it’s necessary to be careful about what you are calling ‘comparable’. This is actually a serious problem for appraisers of all kinds of property, not just jewelry, because we generally really to like to use auction results as an anchor for deciding on value. There are several pitfalls in the whole process when using auction results and dealers just love to point out interesting items, as long as they’re to the dealers’ benefit. Otherwise it’s just an anomaly.

It will be curious to watch over the next few weeks to see if any of these 27 stones turn up in the PS database and if they do, at what price. It wouldn’t surprise me if we see at least a few of them although they may be hard to recognize because the certificate scans and sarins are gone.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Jewelry Appraisals in Denver

 

[strmrdr]

Date: 9/21/2007 5:54:29 PM
Author: denverappraiser
Careful Storm, as Garry points out, few of the stones are the sorts of things that would do well here and so it’s necessary to be careful about what you are calling ‘comparable’. This is actually a serious problem for appraisers of all kinds of property, not just jewelry, because we generally really to like to use auction results as an anchor for deciding on value. There are several pitfalls in the whole process when using auction results and dealers just love to point out interesting items, as long as they’re to the dealers’ benefit. Otherwise it’s just an anomaly.

It will be curious to watch over the next few weeks to see if any of these 27 stones turn up in the PS database and if they do, at what price. It wouldn’t surprise me if we see at least a few of them although they may be hard to recognize because the certificate scans and sarins are gone.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Jewelry Appraisals in Denver

I compared like quality in the all diamonds search not too the premium stones or in house stones.

 

[diagem]

Date: 9/21/2007 5:54:29 PM
Author: denverappraiser
Careful Storm, as Garry points out, few of the stones are the sorts of things that would do well here and so it’s necessary to be careful about what you are calling ‘comparable’. This is actually a serious problem for appraisers of all kinds of property, not just jewelry, because we generally really to like to use auction results as an anchor for deciding on value. There are several pitfalls in the whole process when using auction results and dealers just love to point out interesting items, as long as they’re to the dealers’ benefit. Otherwise it’s just an anomaly.

It will be curious to watch over the next few weeks to see if any of these 27 stones turn up in the PS database and if they do, at what price. It wouldn’t surprise me if we see at least a few of them although they may be hard to recognize because the certificate scans and sarins are gone.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Jewelry Appraisals in Denver

Optimistic hey...

 

[strmrdr]

Date: 9/21/2007 5:03:07 PM
Author: DiaGem

Date: 9/21/2007 4:02:16 PM
Author: strmrdr
hmm taking the ones that sold and comparing them to PS price search shows a 1k to 2k profit potential.
Somewhere around 20% profit potential which is above the low end PS search markup of 8%-10%
So getting 10% under wholesale is pretty pathetic.
Sounds like they just attracted people looking for bargains.

It actually shows me dealers are not letting go easily...
Garry doesnt strike me as an individual ''looking for bargains''...

, after all he did say ''I had some bids that should have been sales,...''

You don''t know Garry that well do ya? (he is always hunting for value high performance stones and its one of his goals to get cutters too cut them, part of his crusade)
He used his not so secret weapon to find the stones with the best potential and bid on em and since he didn''t get em it must have been a low bid.

 

[diagem]

Date: 9/21/2007 6:11:38 PM
Author: strmrdr

Date: 9/21/2007 5:03:07 PM
Author: DiaGem

Date: 9/21/2007 4:02:16 PM
Author: strmrdr
hmm taking the ones that sold and comparing them to PS price search shows a 1k to 2k profit potential.
Somewhere around 20% profit potential which is above the low end PS search markup of 8%-10%
So getting 10% under wholesale is pretty pathetic.
Sounds like they just attracted people looking for bargains.

It actually shows me dealers are not letting go easily...
Garry doesnt strike me as an individual ''looking for bargains''...

, after all he did say ''I had some bids that should have been sales,...''

You don''t know Garry that well do ya? (he is always hunting for value high performance stones and its one of his goals to get cutters too cut them, part of his crusade)
He used his not so secret weapon to find the stones with the best potential and bid on em and since he didn''t get em it must have been a low bid.

Storm, I am familiar with Garry''s writing for three years (although here on PS only)..., I cant imagine him spending soo much energy and time ($$$) on ''his'' (or not) secret weapon to just come to a tender and low bid a bargain..., humm, doesnt sound right...

Storm, you dont know how these tenders work..., basically to purchase high quality Diamonds from this type of tender (auction), you MUST:
a) be the biggest sucker of them all (cause only the highest bid takes presuming you passed the reserve.)
b) be a true professional in your field..., dont waste your "precious" time trying to fish bargains..., it is not the place or time for try-outs!!!
you need to pay the biggest possible sum and at the same time make sure you win and still leave some margin room.

There is no rooms for mistakes!!!

 

[diagem]

Date: 9/21/2007 4:42:19 PM
Author: DiaGem

Date: 9/21/2007 3:37:23 PM
Author: oldminer
If 1.01ct E-VVS2 brings $x,xxx p/c then similar diamonds of this size will bring similar prices, probably. The market for other diamonds is perceived to be set by the prices obtained on 1 carat diamonds. If you can use an excel spreadsheet one can turn out a series of formulae to pretty much describe the remainder of the common sizes in the market, 1/2 to 3 carat. I used to do very much the same with old European cut diamonds. I published buy-sell prices for over 20 years which were distributed worldwide. I didn''t have every diamond, but I had a good clue as to how to adjust from what I knew and was actively dealing in. I used excel and formulas to get the tables I published filled in from .01ct to 5.99ct. Way smarter fellows are involved with Rapaport. they can do wonders with math and formulas.

The prices of other Diamond ''sizes''?
I dont agree!!! Especially these last few years.

I would agree with you that twenty years ago (or actually up to about 6-7 years ago) you could have pointed out a ''common sense'' in valuing oec''s... (or any Diamonds, small or large), but I bet your range of prices are way out of reality these days.

Back in history there was a type of formula used in regards to estimating value on a weight vs. weight vs. quality basis..., Jean Baptiste Tavernier wrote ''his own formula'' in his Travels in India. And I must admit..., when I first read it..., I was surprised at the healthy common sense he had 400 years ago.

But these days seem becoming different..., I wrote a long time ago that (in my opinion) Rap-sheet is becoming less relevant from year to year..., yes, dealers are still using his #''s as a starting point for some type of guidance, but in the larger sizes his numbers are starting to mean less and less!
Some dealers are so lost cause the only fashion they got use buying Diamonds is through using the RapSheet..., today many of them are getting lost in their purchasing attempts.

Dave, I think and strongly believe setting value on Diamonds reminds me how we valued Diamonds back in the old days, sure fine cut rounds of 2 grainers to ''about'' three carats are still calculated in a most simple fashion...., but fancies have their own rules and it dominates now!

Yes, Martin is a extremely smart guy..., but I dont think he has the power anymore..., he is trying his best to stay on top of the ''simple'' round prices as we can see his attempt to commoditize ''ROUND'' Diamonds from 4 grainers to (maybe) three caraters. Yes, I know he is aiming for a wider range..., but lets see him hack this one first...

The laws of rough Diamonds have their own sets of (individual) rules..., rough producers are calling the shots these past and upcoming years when setting a price is concerned..., and DeBeers are not there to control the prices anymore.

This is a prime example of what I meant:



"ALROSA''s 24th Auction Sells Out for $38M "

You can read: http://www.diamonds.net/News/NewsItem.aspx?ArticleID=19045


Ladies & Gentlemen..., these are the price-setters these days..., the Rough producers!

 

[Garry H (Cut Nut)]

I was fishing for bargains in VS2 that met my cut criteria.
There were not many. And not all my bids were competitive because for e.g. I will not pay as much per carat for a 1.08ct as a 1.00ct etc

Re Rap''s list relevance - I think it is rather deliberate to let size and rarity catagories develop their own dyneamics because the list is now so widely used that it needs some finesse for dealers to make money using it. (If that is not clear, then I will not have to kill you)