- Joined
- Sep 3, 2000
- Messages
- 6,756
Rather than hijack the JCK 2009 thread, I wanted to address some issues raised by Strmrdr which are important. The yellow are quotes I edited to be sure they were precise in their meaning.
Dave, a huge problem, even with consumers here that know more about diamonds than anywhere on earth, is that the trade could not convince people that the price increases were legitimate.
Prices on diamonds rise, stay stable or fall based on many factors. It is not a simple situation since one must look at exchange rates, the costs of mining or choosing not to mine, the push and shove of DeBeers and other major rough distributors. Prices as reported by Rapaport often do not mimic the actual market, but are fabrications with the intent to help stabilize things during turmoil. The actual prices being paid are not reported in many place, but the theoretical prices being asked, no matter how high and crazy, are often reported as it they were actual transactional prices, which we know they are not. If a consumer shops with the Pricescope search, they will rapidly discover the asking prices for diamonds. They can find the best value of the day and that is all they can do. There is no predictor of tomorrow's prices. One hiccup in this crazy environment and prices could go way up or way down. Supply is tight, demand in the USA is off, but said to be growing rapidly outside our borders. Americans no longer call the tune we all dance to. I don't see how anyone could possibly know how or how not to justify the asking prices on diamonds over a period longer than today. Today's prices are based on today's total situation. It can change in the wink of an eye and who will dare to predict. We might know that demand here will be flat to declining for a period still, but what about the entire rest of the world? The trade does not have an obligation to convince folks about prices. They must convince people to spend money on diamonds at the prices required today. That's a big job in itself, but it is a smaller job than to justify the events and pressures of the world.
Ask any consumer that was here at that time why prices went up and they will tell you DeBeers greed.
DeBeers may have some greed, but it has regularized diamond trading for years to the huge benefit of many dealers. Such a well defined pricing structure, so many wealthy dealers, so many people who made great profits on diamonds. The ride was very good while it lasted. Consumers bought what they wished and still do, but today the consumer is paying less profit, getting less sizzle, but getting more diamond relative to the money spent. However, due to the market, consumers here are paying more dollars. DeBeers has huge financial issues and no one will bail them out like Fiat and the US Government did for Chrysler. Either they redefine themselves or DeBeers will disappear. I don't see loss of the regulating body of the diamond business as a positive thing because I look at the horrible model of the colored gemstone business as the only alternative currently out there. If diamonds are a mess, then colored stones are completely in the toilet. No body promotes them, prices are totally confusing, treatments are all over the place and no one is in charge. I much prefer DeBeers to anarchy. Without the many manipulations over the years that DeBeers succeeded in, we'd have a very different diamond business today. Maybe it would be okay but I think it would be far worse than what we have now. That's my opinion and someone may have evidence to the contrary worth hearing about. It needs to be a fair discussion based on facts, not rumors or anger.
The news of diamond stockpiling to keep prices high is not helping.
Stockpiling prevents crashing prices. Without control, the assets of many major diamond sellers and producers are as toxic as bad real estate loans, maybe worse. Since no one will help the industry to survive except its own members, I think controlled stockpiling has its place in keeping some stability. I know it can be abused, but the need to bring in cash works very nicely to keep stockpiling somewhat in check. Oversupply is no good either.
The industry as a whole has a huge image problem.
Of course it does. That's why some many regulars on Pricescope work on image building for the industry. When you take a cruise to the islands, the jewelers hire a guy to talk you up and convince you to buy when you get off the ship. No one does this for domestic jewelers and it is a shame to see people do poorly when on vacation while avoiding their local, home town jeweler for no good reason. We do so little to promote ourselves in a good light and we often are the victims of the press which looks most for bad news to report. By the time this recession ends, there will be a far smaller jewelry industry composed of a higher percentage of good people than any time in my 40+ years in the biz. The bad ones are dropping out or closing although we will lose some good folks, too. You can't spend your way into having a good image or a good reputation. The more you tell people how wonderful you are, the more they gain a lingering doubt of your sincerity. You earn it by living and acting a certain way. There are no shortcuts. (I've looked).
Dave, a huge problem, even with consumers here that know more about diamonds than anywhere on earth, is that the trade could not convince people that the price increases were legitimate.
Prices on diamonds rise, stay stable or fall based on many factors. It is not a simple situation since one must look at exchange rates, the costs of mining or choosing not to mine, the push and shove of DeBeers and other major rough distributors. Prices as reported by Rapaport often do not mimic the actual market, but are fabrications with the intent to help stabilize things during turmoil. The actual prices being paid are not reported in many place, but the theoretical prices being asked, no matter how high and crazy, are often reported as it they were actual transactional prices, which we know they are not. If a consumer shops with the Pricescope search, they will rapidly discover the asking prices for diamonds. They can find the best value of the day and that is all they can do. There is no predictor of tomorrow's prices. One hiccup in this crazy environment and prices could go way up or way down. Supply is tight, demand in the USA is off, but said to be growing rapidly outside our borders. Americans no longer call the tune we all dance to. I don't see how anyone could possibly know how or how not to justify the asking prices on diamonds over a period longer than today. Today's prices are based on today's total situation. It can change in the wink of an eye and who will dare to predict. We might know that demand here will be flat to declining for a period still, but what about the entire rest of the world? The trade does not have an obligation to convince folks about prices. They must convince people to spend money on diamonds at the prices required today. That's a big job in itself, but it is a smaller job than to justify the events and pressures of the world.
Ask any consumer that was here at that time why prices went up and they will tell you DeBeers greed.
DeBeers may have some greed, but it has regularized diamond trading for years to the huge benefit of many dealers. Such a well defined pricing structure, so many wealthy dealers, so many people who made great profits on diamonds. The ride was very good while it lasted. Consumers bought what they wished and still do, but today the consumer is paying less profit, getting less sizzle, but getting more diamond relative to the money spent. However, due to the market, consumers here are paying more dollars. DeBeers has huge financial issues and no one will bail them out like Fiat and the US Government did for Chrysler. Either they redefine themselves or DeBeers will disappear. I don't see loss of the regulating body of the diamond business as a positive thing because I look at the horrible model of the colored gemstone business as the only alternative currently out there. If diamonds are a mess, then colored stones are completely in the toilet. No body promotes them, prices are totally confusing, treatments are all over the place and no one is in charge. I much prefer DeBeers to anarchy. Without the many manipulations over the years that DeBeers succeeded in, we'd have a very different diamond business today. Maybe it would be okay but I think it would be far worse than what we have now. That's my opinion and someone may have evidence to the contrary worth hearing about. It needs to be a fair discussion based on facts, not rumors or anger.
The news of diamond stockpiling to keep prices high is not helping.
Stockpiling prevents crashing prices. Without control, the assets of many major diamond sellers and producers are as toxic as bad real estate loans, maybe worse. Since no one will help the industry to survive except its own members, I think controlled stockpiling has its place in keeping some stability. I know it can be abused, but the need to bring in cash works very nicely to keep stockpiling somewhat in check. Oversupply is no good either.
The industry as a whole has a huge image problem.
Of course it does. That's why some many regulars on Pricescope work on image building for the industry. When you take a cruise to the islands, the jewelers hire a guy to talk you up and convince you to buy when you get off the ship. No one does this for domestic jewelers and it is a shame to see people do poorly when on vacation while avoiding their local, home town jeweler for no good reason. We do so little to promote ourselves in a good light and we often are the victims of the press which looks most for bad news to report. By the time this recession ends, there will be a far smaller jewelry industry composed of a higher percentage of good people than any time in my 40+ years in the biz. The bad ones are dropping out or closing although we will lose some good folks, too. You can't spend your way into having a good image or a good reputation. The more you tell people how wonderful you are, the more they gain a lingering doubt of your sincerity. You earn it by living and acting a certain way. There are no shortcuts. (I've looked).
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