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Have you ever tried to sell a diamond?
- raganwald 17y agoBrod estimates that a half-carat diamond ring, which might cost $2,000 at a retail jewelry store, could be sold for only $600 at Empire.
- kurtosis 17y agoSo it is probably inevitable that the price of diamonds will plunge, but there are still amazing possibilities with synthetic gems. It should be possible to create synthetics with careful control of impurities so that they have designer optical properties. It reminds me of failed business venture by Kary Mullis the guy who got the nobel prize for PCR. He was going to create a business that would embed the cloned DNA of a celebrity or deceased ancestor into a piece of jewelry for a fee. While this business was unsuccessful I think that if people keep experimenting with this kind of thing someone will win big.
- regularfry 17y agoWhat's astonishing is that, in the 28 years since this article was published, De Beers and the retail diamond market have failed to collapse. I'll readily admit to not knowing one bit of information about the wholesale or investment diamond markets, but given the picture painted, De Beers must have something really special going on.
- paulgerhardt 17y agohttp://www.portfolio.com/executives/features/2007/04/04/Queen-of-Diamonds/ http://www.portfolio.com/executives/features/2007/04/04/Quee... "...in July 2000, when the famously secretive South African company announced it would stop its efforts to control the world’s diamond supply. In a glorious understatement, chairman Nicky Oppenheimer later explained the decision: 'As new sources of supply opened up—particularly in Canada—it became evident that that role could not be sustained.'" The BHP Billiton group and Rio Tinto were big players in the Australian discovery mentioned near the end of the Atlantic article.
- jcl 17y agoIt's mostly a brilliant manipulation of public expectations. The article illustrates it beautifully: the creation of the matrimonial diamond ring in America and then Japan, the manipulations needed to sell small diamonds one year and big diamonds another. As I've heard it, when synthetic diamonds arrived on the market, it turned out that they had fewer impurities than natural diamonds. The cartel's advertising changed to emphasize the uniqueness of natural, "genuine" diamonds (which presumably have just the right number of flaws). A 2003 Wired article on synthetic diamonds: http://www.wired.com/wired/archive/11.09/diamond.html http://www.wired.com/wired/archive/11.09/diamond.html
- TeHCrAzY 17y agoI hope people note this: Literally perfect diamonds can be produced for impressively small amounts of money, and the cartel barely bats an eyelid, happily swinging into their next marketing campaign to secure their position. We should all learn from these masters of marketing.
- simon_ 17y agoThe pain you feel selling diamonds is much more due to the huge markup charged by retail jewelers than anything De Beers has done. It might be true that they're doomed as long term investments, but if you buy a diamond for a fair price (e.g. at Blue Nile), I'd expect you to be able to turn around and sell it for >75% of what you paid.
- wisty 17y agoEven without the markup, diamonds are not going to be easy to sell. A valuation based on cut, caret, color and clarity is going to be hard to do. The buyer must accept a risk that they have undervalued (and you will shop around to find the buyer who undervalues it the most), so they need to give themselves some margin of error.
- deleted 17y ago[deleted]
- ryanelkins 17y agoKeep in mind that this article was apparently written in 1982 so it's nearly 30 years old. Not that this invalidates it, but you should take into account that times change (although, with diamonds, they are largely the same). Personally, my wife and I decided to buy a synthetic diamond for her engagement ring. She didn't want me to spend alot of money on it (knowing that whatever I spend is really "our" money once we are married anyways and thought it silly to tie up so much money in something you'd never actually sell). She didn't even want a diamond since they were so expensive in general. In the end we found a company that made synthetics that we liked and were able to get a nice sized stone for very little money. It gets the requisite social oohs and aahs and we don't have to explain why we think spending money on a diamond ring is silly.
- mshafrir 17y agoCare to share some more details on the company you ended up going with?
- ryanelkins 17y agoI don't remember the name of the company off of the top of my head as it has been a few years but I'll see if I can find it and post it here.
- eru 17y agoAs an alternative you can just go with Zirconium dioxide (http://en.wikipedia.org/wiki/Cubic_zirconia http://en.wikipedia.org/wiki/Cubic_zirconia).
- ryanelkins 17y agoI believe this was the company - http://www.diamondnexuslabs.com/ http://www.diamondnexuslabs.com/
- pbiggar 17y agoI went with Brilliant Earth. They do Canadian diamonds (so not De Beers). They use recycled gold too, and also offer other gemstones.
- jpablo 17y agoThis Warren Buffett quote on gold could very easily be changed to apply to diamonds: "Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
- gus_massa 17y agoDiamonds are very usefull as abrasives and for cutting tools, 80% of mined diamonds are destined for industrial use.
- jpablo 17y agoAren't those applications the perfect use for artificial diamonds ?
- wmf 17y agoAs long as artificial diamonds are cheaper. Last I heard, natural industrial-quality diamonds were cheaper than artificial ones, which were cheaper than natural gem-quality.
- cma 17y agoDon't diamond sizes follow a power law? i.e. maybe 80% of mined diamonds wouldn't be big enough to facet and set on a ring.
- 3pt14159 17y agoExcept that diamonds are just a form of carbon, whereas gold is divisible and un-manufacturable. Say what you want about diamonds, they way will pass as technology makes more and more strides, but gold does have industrial use as well as financial use. Gold is money when the future is completely uncertain. Heck, the Dow hasn't moved since the thirties when priced in gold.
- jpablo 17y ago
- deleted 17y ago[deleted]
- clistctrl 17y agoWhen talking to my girlfriend, she mentions she is not interested in diamonds. This seems to be the next candidate: http://www.moissaniteco.com/moissanite-wedding-sets-c-106.html http://www.moissaniteco.com/moissanite-wedding-sets-c-106.ht...
- pbiggar 17y agoNo, pick another gemstone, perhaps a Sapphire.
- grannyg00se 17y agoWhy do you say that? The Moissonite sounds nice. Good colour, clarity, and hardness. More brilliance than diamond.
- clistctrl 17y agoWhat are the benefits of a Sapphire? I'm not looking forward to the day I need to buy a ring, i'm way out of my knowledge domain :)
- harshpotatoes 17y agoThis line particularly tickled my fancy: "Nobody took into account that diamonds, like any other commodity, can drop in value" The wheel of time turns, ages come and go.
- bunni 17y agoI'd talk to Doug the Head. If it's stones and it's stolen, Doug's the man to speak to.
- jrockway 17y agoA case study in perfect marketing. I remember mentioning to some reasonably intelligent girl on how I would never buy my wife-to-be a diamond, and remember the reaction being the very definition of "scoff". The fact that someone wouldn't buy their lover a worthless rock is just too unreasonable to even contemplate. One thing I like about wars is that they help thin out the human race. Hopefully one day, we will completely kill ourselves off; then I can finally be happy knowing that everyone alive will be thinking for themselves.
- eru 17y agoI am glad the De Beers advertising campaign hasn't been that effective in all countries, yet.
- drusenko 17y agoi would presume that the scoff came more from the implied "I am unable to understand or appreciate the needs and desires of a female partner" than it had to do with the logic behind the statement. if you find a partner who doesn't want a diamond, then you are completely justified in not getting her one (just because she says she doesn't want one, doesn't necessarily mean she doesn't, though). otherwise, the real value isn't in its intrinsic value, but in the various byproducts -- the signal it sends, how she's able to show it off to her friends (and will be expected to), the fact that she's likely been dreaming about it since childhood, etc. just like any social norm, it doesn't always make sense. but by refusing to do something because you think it doesn't make sense, the real thing you're saying is that it's about your needs, not the other person's.
- donaq 17y agothe real thing you're saying is that it's about your needs, not the other person's. Really? Why, because you say so? Firstly, no girl "needs" a diamond. Secondly, doing things that don't make sense in order to please others has already been a cause of too much suffering in history already. Lastly, by insisting on having your partner spend a significant amount of money to buy you something that has no real value just so you can show off, the real thing you're saying is that it's about your needs, not the other person's.
- Whippet 17y agoWhen my wife and I became engaged, she wanted to choose her own ring. Since I was leaving on a business trip, we agreed on a ballpark price range and she went looking. While she likes diamonds, they are not her favorite gem stone. She ended up buying a very nice emerald ring with much smaller diamonds channel set on either side. So when an anniversary approached, and I want to give her a bracelet, earrings, or some such item, diamonds don't even come into consideration. While I don't preach my view to others, I have been asked a few times about gift ideas by other guys. I try to steer them away from diamonds, endeavoring to explain the scam for what it is.
- wglb 17y agoThis is certainly an intriguing article. Is there any more recent information about the stability of the market?
- dpatru 17y agoSeems like an opportunity for a startup: help people get the highest price for their jewelry.
- andrewljohnson 17y agoThe diamond engagement ring was invented by a PR company hired by De Beers: http://blogs.static.mentalfloss.com/blogs/archives/21211.html http://blogs.static.mentalfloss.com/blogs/archives/21211.htm... Personally, I got suckered into buying an engagement ring one time, but the engagement didn't take. After lots of searching, I was eventually able to sell the ring for half what I paid for it. I used the money for gas and moved to California :)