Archive for January, 2009

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Steel Curtain

Friday, January 30th, 2009

 

On February 1, 2009, the Pittsburgh Steelers are going to win the Super Bowl. But for bettors, they are going to make you sweat! The Cardinals’ offensive front line will hold for the first half allowing Kurt to pass at will to put up at least 16 first half points.

 

If the Steelers are lucky and convert their last drive of the half, they will enjoy a 19-16 or 21-16 lead. The third quarter will be a quarter of turnovers, misfiring, and out-and-out dropped balls that would have given Arizona the lead again.  I see very few third quarter or early fourth quarter points. As the closing minutes approach, Arizona fans and those taking the under will start feeling a little comfortable.  However, the Arizona front line will crumble two crucial times leading to 10-14 unanswered points by the Steelers. Final score will be:

Steelers 34    Cardinals 23

Congratulations both teams!

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Vol. 8.2 World’s Greatest Chocolate

Friday, January 30th, 2009

This Valentines’ Day I want to share with my readers a little secret. Are you ready? Here it is… Madame Chocolat, Beverly Hills. I have never had better chocolate in my life, bar none, than these delicate Bon Bons that Chef Hasty Torres whips up every single day!

 

Whether it is Amour chocolates, filled with liquid caramel with a splash of rum, or Ooh La La’s that explode in your mouth with exotic passion fruit and a hint of Alize liqueur, or the Mademoiselle, fresh raspberry mixed in milk or dark chocolate ganache, all are in a class by themselves. I can go on and on and on. The Le Papa made from smooth Courvoiser, “French cognac”, in a dark chocolate ganache; the Mendiant, white milk or dark chocolate squares with roasted almond, pistachio and dried apricot; the Citron, creamy white chocolate ganache blended with freshly squeezed lime juice or my favorite the Jus d’Orange, fresh squeezed orange juice in white chocolate ganache!

 

These chocolates aren’t cheap, and for the longest time they were the best kept secret of Hollywood movie stars and moguls. But now, Madame Chocolat, will ship nationwide for us mere mortals that can’t fly to Beverly Hills, California for a taste of Heaven. Through www.madame-chocolat.com, Madame Chocolat’s wonderful staff (they may be Santa’s Elves that work with her during the off season) will personally pack your little private box of paradise and ship it to you anywhere in the world! Keep in mind, billionaires have had to send their private planes to get a shot at her limited daily allotment of goodies. But not anymore! In these uncertain economic times, all of us are making one sacrifice after another to make ends meet, but we all have another inalienable right! The right to scrumptious, lip smacking, make-you-want-to-slap-your-mama chocolate!

 

In 2009, rededicate yourself to one thought, “Life is short! Eat more chocolate!”

 

Talk to you next time,

Fred

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Vol. 8.1 “Just Help”

Thursday, January 22nd, 2009

Happy New Year! It’s January 5th, 2009. I want to share this article with you as you start a new year. It’s an article titled “Just Help” from this month’s Bits & Pieces. Let’s make sure we continue the holiday season spirit throughout our whole year.

 

“Thomas Cannon’s life may have seemed unremarkable. He had a wife, two sons, and a job as a postal clerk. He didn’t own a fancy house or drive a swanky car. But he had one interesting habit: He liked to give away money.

People often wondered how he could afford to be so generous. Cannon’s explanation was simple: He lived well below his means and did without the luxuries of life so he could help others.

He developed this philosophy during World War II while enlisted in the Navy. Cannon was away for training when a tragic accident claimed the lives of his shipmates. He believed that his life had been spared for a reason. After being discharged, he completed his education (from 8th grade through undergraduate degree), took a job at the U.S. Post Office, and then earnestly pursued the mission he thought he’d been “assigned”: to be a positive role model and serve others.

Most of the folks he donated money to were people in his town whom he read about in the local newspaper. He awarded them $1,000 for their commitment to charitable endeavors or for whatever hardships they were struggling against. Over the years, he distributed more than $150,000 to needy and deserving individuals- all while raising a family on an annual salary that never exceeded $20,000.

Before he passed away, Cannon made it known that he didn’t want a foundation to carry on his work, a statue to honor what he did, or his name attached to anything. But he did want his legacy to survive.

And the best way to do that, Thomas Cannon suggested, was easy: ‘Help somebody.’”

 

-Fred

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Vol. 7.12 “My Christmas Wish”

Thursday, January 22nd, 2009

It’s December 13, 2008. Twelve days from now it will be December 25th. I know, I know, you’re impressed with my math skills. For some of you (me included), it will mean Christmas. For others, it will be just another day—no different than the day before, no different than the day afterward. For half of the world, the goal will be to just survive. Will there be enough food? Will there be enough water? Where will I sleep tonight? These are the questions half of the people on this planet will ask themselves. They won’t be opening i-phones, playing video games, or trying on a new pair of shoes. No gifts, just now. It’s always just now. The future isn’t something you plan for when you are just trying to survive.

If you are reading this, consider yourself lucky. You were born with a legacy of advantages and opportunities others would die for—are dying for. Opportunities aren’t evenly distributed in this world. Some of us get a basketful, some get one and some get none. But, opportunities are available. The trick is for those of us with the basketful to take only what we need and share the rest. I read recently that if you have enough money to feed yourself and your family, you have enough to help at least one other person. Half of us have more than enough; half of us don’t have enough. Let’s share our opportunities.

There are a lot of brave deserving souls out there who aren’t looking for a handout but are looking for a way out of poverty. Everyone deserves at the very least one opportunity. Give that to someone this Christmas. Be the spark that ignites the candle of hope for those whose light has gone out.

Be the light that guides the less fortunate back home. Next time you avoid eye contact with the homeless on the street or step over someone as if they weren’t there, remember but for the grace of God, there goes me. It is my Christmas wish that this December 25th will be a new beginning for those who have spent a lifetime just trying to survive.

 

-Fred

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She Awakes

Tuesday, January 20th, 2009

  • January 20, 2009, a day that will live in infamy! Or I could say January 20th is a day that lives in infamy. Here are some things you may not be aware of that happened on this fateful day.

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    • 250 – Emperor Decius begins a wide spread persecution of Christians in Rome. Pope Fabian is martyred.
    • 1649 – Charles I of England goes on trial for treason and other “high crimes.”
    • 1841 – Hong Kong Island is occupied by the British.
    • 1942 – World War II: At the Wannsee conference held in the Berlin suburb of Wannsee, senior Nazi German officials decided on the “final solution to the Jewish question”, accelerating the Holocaust.
    • 1990 – Black January – crackdown of Azerbaijani pro-independence demonstrations by Soviet army in Baku.
    • 1991 – Sudan’s government imposes Islamic law nationwide worsening the civil war between the country’s Muslim north and Christian south.
    • 1992 – Air Inter flight 148 crashes near Strasbourg France killing 82 passengers and five crew.
    • 1999 – The China News Service announces new government restrictions on internet use.
    • 2009 – My wife collapses and slips into unconsciousness at 10:32pm at the Western Inaugural Gala, Washington D.C. Just minutes before our newly minted President Barrack Obama is about to step onto the stage with his wife.

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    • When I look back at January 20th of the past, I can label all these events bad and get angry and combative. Want to see the dark days of our past? They’re there. But if I change my focus just a little (you don’t even have to squint) you also find the same days live in virtue.

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      • 250 – Pope Fabian is martyred. After his death, he becomes a saint. A prayer is dedicated in his honor.

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      • “Pope Saint Fabian, it’s so easy to believe that peace means a life without conflict or suffering. Help us to see that only true peace is the peace that Christ brings. Never let us as a church or as individual Christians choose to deny our beliefs simply to avoid an unpleasant situation. Amen.”

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      • His prayer and his legacy has gone on to help countless people who might have lost their faith and their convictions.

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        • 1649 – Charles I of England proclaims that he has the divine right of kings, which is the belief that kings receive their power from God. Their power was a mandate from Heaven and absolute. It could easily be argued that from King Charles we learn that absolute power corrupts absolutely. Through his actions, we understand that there must be a balance of power. Even from the ashes can rise a phoenix to guide us.

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        • We can go through the entire list, heck, our entire lives and point to the bad or pluck out the good. They’re both there. An unexpected dehydration and then getting a concussion can be one way I can choose to remember January 20, 2009, but that’s not how I choose to remember it. When asked what happened on that special day, I will only have one response. As a nation, just like my wife, we woke up and all of us became a part of history.

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    The Great Diamond Crash

    Sunday, January 18th, 2009

    May 14, 2008

    If I had to take a guess, I would estimate that there are over one billion carats of diamonds in the hands of consumers. That is over 100 times the annual consumption gobbled up for weddings, anniversaries, birthdays and even Super Bowl rings. The diamond markets for consumers exist in two categories; commercial grade (bluff stones) and non-commercial (the good stuff). A good diamond is defined as a “diamond that will hold its value and/or appreciate in value over time.” The current “cut rate” (distribution of commercial to non-commercial diamonds) is 49 to 1. For every good diamond that is sold in the US there are 49 crummy (commercial) ones. The average resale value of a commercial grade diamond is 19.7% of the original dollars paid; the average resale value of a non-commercial grade diamond is 85%– worst case, 60%; best case, 100% or better. Diamonds have never been considered an investment instrument after one billion dollars was lost by consumers buying diamonds as a hedge against inflation in 1980.

    But, it appears some lessons aren’t easily learned. For anyone who has been paying attention, you would have noticed that large, investment grade (IF, VVS1, VVS2 & D, E, F) diamonds have been sky rocketing in prices! Currently a 5ct D,IF is selling for over 3/4 of a million dollars. That’s about double what it was just a few years ago. However, we don’t have to look hard to see other commodities mimicking the same exponential, unrealistic growth. Oil, gold, platinum, rice, wheat, etc… everything is up! Way up! The question is this: is this the new reality or have we fallen down the rabbit hole? The prices people are paying for some diamonds is reflecting a market mania. The current diamond climate is creating a craze very similar to the tulip mania in the early 1600s in Amsterdam. Believe it or not, back then, at the height of the mania, a tulip went for $76,000 a bulb! Six weeks after smart money got out, the price had fallen to a dollar!

    Within 12 months there are going to be a lot of sad people sitting on a lot of big investment grade diamonds that will be worth a fraction of what they paid. My advice is this: for the next year, stay away from 2ct+ investment grade diamonds unless you are willing to be a statistic in the great diamond crash of 2009. If you are going to buy a 2ct non-commercial rock that isn’t investment grade, you will still have to pay at least 20% more than what its cash liquidity is worth! That said, if the world ever wakes up and realizes that nobody really needs a diamond and everyone goes to the market to sell at the same time, tulips and diamonds will have more in common than being pretty; they’ll both be a cautionary tale.

    by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.”
    More questions? Ask the Diamond Guy®

    Reference:


    NBC Nightly News April 19,2009

    Visit msnbc.com for Breaking News, World News, and News about the Economy

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    Show Me The Love: Falling Diamond Prices Equals Big Opportunity

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    Blood Diamonds

    Saturday, January 17th, 2009

    Blood diamonds are synonymous with conflict diamonds. The term is designed to dramatically emphasize that behind the glamorous image of diamonds lies a web of corruption, influence peddling and brutality in some parts of the diamond-producing world.
    Consumers began clamoring for assurances that the diamonds they desired were not being used to finance conflicts. To that end an alliance of government, civil and industry groups created the “Kimberley Process” to clean up the trade in rough diamonds.
    First, in 1998 the United Nations (UN) initiated action that culminated with the establishment of the “Kimberley Process.” However, the UN’s definition of the term blood diamond or conflict diamond is very narrow and was designed to get everyone on board. The definition reads as follows:
    “A blood diamond (conflict diamond) refers to a diamond mined in a war zone and sold in order to finance an insurgency, invading army’s war efforts, or supporting a warlord’s activity.”
    Next, in July 2000, the World Diamond Congress in Antwerp passed a resolution blocking the sale of blood diamonds. The resolution installed an international certification system on the export and import of diamonds. Countries could only accept sealed packages of diamonds with an official seal, and criminal charges would be levied against anyone and everyone trafficking in blood diamonds.
    Six months later, in January 2001, the top elements of the diamond industry formed a new organization—the World Diamond Council. They drafted a process whereby all know diamond rough could be “certified” as coming from a non-conflict zone. Thus, the “Kimberley Process” was created and approved by the UN in March 2002. The United States followed with the Clean Diamond Act in April 2003, and the “Kimberley Process” became law in the United States.
    According to the “Kimberley Process” website, there are now 46 members blessed by the Kimberley experts. Only the Ivory Coast (Africa) has rebel forces that control diamond production, but less than 0.2% of the industry.
    Our narrative could end here, but I have a much broader definition for a blood diamond. Here is my definition:
    • Any diamond that was mined using oppressed labor in unsanitary working conditions.
    • Any diamond whose oppressed labor force was victimized in the form of rape, mutilations (loss of arms or legs), beatings, verbal abuse, unconscionable working hours, and below poverty wage structure.
    • Any diamond that the company who mined it or controls its tariffs is part of a monopoly.
    • Any diamond that funds wars or corporate greed where profits supersede human life.
    • Any diamond that is used to oppress any human life or the extinction of any race, tribe or sub-culture.
    • Any diamond that is purposely graded incorrectly and marketed for corporate profits instead of consumer satisfaction.
    • Any diamond that is sold at a price above its secondary market resale value forcing the consumer to take a significant loss if it was to be resold.
    So, what percentage of diamonds sold in the world today are blood diamonds? Well, maybe the question should be what percentage of diamonds are NOT blood diamonds.
     
    by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.” More questions? Ask the Diamond Guy®

    Posted in Understanding the Diamond Trade | No Comments »

    Building Noah’s Ark & Joining Lucy

    Saturday, January 17th, 2009

    Genesis 6 (New International Version)
    1
    When men began to increase in numbers on Earth and daughters were born onto them,2 the sons of God saw that the daughters of men were beautiful, and they married any of whom they chose.3 Then the LORD said, “my spirit will not contend with man forever, for he is mortal; his days will be a hundred and twenty years.”

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    The Nephilim were on the Earth in those days- and also afterward- when the sons of God went to the daughters of men and had children with them. They were the heroes of old, men of renown.

    5
    The LORD saw how great man’s wickedness on the Earth had become, and that every inclination of the thoughts of his heart was only on evil all the time.6 The LORD was grieved that he had made man on the Earth and his heart was filled with pain.7 So the LORD said, “I will wipe mankind whom I have created, from the face of the Earth- men and animals, and creatures that move along the ground, and birds of the air- for I am grieved that I have made them.”

    Well, let’s see. In the last couple of weeks Bear Stearns got bought out by JP Morgan Chase for $2.00 a share; oil broke past $110 a barrel; the dollar dropped to an all-time low against the Yen and the Euro; the housing crisis is still out of control; gold passed $1,000.00 an ounce and platinum past $2,200.00 an ounce. The president is telling us the check is in the mail.
    Now I have an idea how Noah felt before the Great Flood. I also have an idea how he must have felt after it started raining. Having built his ark he must have felt relieved! (If there was rain with no ark, he would have been kicking himself!). In the current economic climate, anyone who has jewelry, is thinking of getting jewelry, or is trying to unload jewelry, needs to build a financial Noah’s Ark to get them through the storm that is currently upon us. Here’s what you need to know.
    Contemplating on buying jewelry? Diamonds- yes! Metals- no!
    Diamond prices are up over 40% in the last two years, and in certain sizes and qualities, prices are expected to double by 2010. If you’re thinking about getting an engagement ring, thinking about upgrading for your anniversary, looking to buy your dream rock, DO IT NOW! Not tomorrow, or this Christmas, NOW! You can thank me later! Diamonds are hot since DeBeers closed their last three underground mines in September 2005 and the prices are going to get very, very, very expensive before they level off. They won’t go down. Read my lips, the prices are in the process of doubling and tripling; they won’t go down. Okay, now let’s say you just bought a new diamond and now want to pick out a gorgeous platinum or fancy white/yellow gold setting… STOP! Keep the setting simple. If you have an old setting you can use over the next 15-18 months, do it. Metal prices have risen as far as the secondary market will allow. Tons of scrap gold and platinum are flooding back into the primary market that is extinguishing the scarcity. The “hot” metals market is ending and you can thank the greed of consumers who are taking all their old jewelry and cashing it in. Within the next year to year and a half, platinum will be back to under $1,000.00 an ounce and gold will be sitting comfortably around $500.00 an ounce (where it should have been years ago). The point is, don’t buy an expensive setting now that will be half-price next year!
    Have jewelry you want to unload? Go to you local jeweler and ask about cashing out any old piece of jewelry while you still can. While I write this article gold has already dropped -$61.00 an ounce! The chance to forget eBay and sell all your old baubles and beads will soon be over!
    A smart jewelry portfolio is like Noah’s Ark. In the Ark should be one or two of your favorite things that you love to wear and everything else should be liquidated. If you are a true connoisseur of diamonds, you’re going to need all the cash you can get from the stuff you don’t wear anymore so you can immediately buy the diamonds of your dreams before the prices are out reach!
    Don’t let Lucy be the only one in the sky with diamonds!
    Happy buying/selling!

    by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.” More questions? Ask the Diamond Guy®

    Posted in Understanding the Diamond Trade | No Comments »

    The Blue Nile Blues

    Saturday, January 17th, 2009

    A little over a year ago, Blue Nile stock peaked at $106.16. As of close of market today, the stock was at $22.90. What a difference a year makes! One might ask if the stock was over priced or the business model is unraveling, or is it just bad timing?

     

    For those of you who don’t know about Blue Nile, let them, in their own words describe what they do.

     

    “The company is built on a unique idea: choosing an engagement ring doesn’t have to be complicated. Diamonds can be simple to understand. Making the right choice can be easy.”

     

    A few years ago, Bear Stearns, AIG, Fannie May, Freddie Mac, Lehman Brothers, Wachovia, Ford, G.M., IndyMac, American Express and countless others said to us with a very similar drum beat, “Buying is easy, credit is easy, credit default swaps and derivatives aren’t complicated, come follow us to the land of riches. Follow us to easy street with cars and homes and diamonds. You deserve a McMansion. You earned a Mercedes Benz. Life is short; buy now! It’s easy! Just charge it! That’s the American way! Want to start a war or two to feel better about 9-11? No problem! Just charge it! Put it on the tab! Pay for it later! Bills? Just pay the minimum. You don’t want to miss the Grand Old Party!

     

    Well America, “Easy come, Easy Go.” On the world stage, all the developed nations took the short cut and are shocked that we stabbed ourselves in the back.

     

    Buying should never be easy. It should be hard. It should be thought out. It should be complicated enough to stop our impulse buying reptilian brains from stockpiling more crap that we could use in ten life times. Half the world doesn’t have clean running water and depends on fire as the main source of energy, and we want easy?

     

    Blue Nile believed they could build a company with no assets. No skin in the game; use other companies’ inventory, play middle man and walk away with an Ebay broker commission. Did it work? Kinda—until customers found out they couldn’t return merchandise they didn’t need after 30 days—until customers found out that they couldn’t exchange mistakes after 30 days—until customers found out that all those precious “certificates” that Blue Nile proudly tout with every diamond sale don’t guarantee the quality or authenticity of what they bought.

     

    How would you feel about buying a refrigerator and getting home and realize you got a trash compactor? A little crushed?

     

    Sadly, in the end Blue Nile, if they survive will be remembered not for top quality at the best price but as a consolidator of ground round that has passed its expiration date. Is it still safe to consume? Don’t ask me; I like to buy things with my eyes wide open from someone who stands behind their product and is there for me if anything goes wrong.

    by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.” More questions? Ask the Diamond Guy®

    Posted in Understanding the Diamond Trade | 1 Comment »

    The Truth Behind BLING: Science or Gimmick?

    Saturday, January 17th, 2009

    What is the #1 requirement we have of a diamond? Hint: see title of article….Very good!! It’s bling–aka sparkle! We expect—heck we demand—that our diamond must sparkle. But let’s stop for a second, and ask ourselves what exactly is sparkle anyway? To answer that question we have to understand light. More precisely we have to understand “visible light”. (See footnote.)

    Visible light is our fluid energy, and a diamond is our spectral container. A diamond can take light traveling in excess of 186,000 miles a second and bring it to a crawl at 77,000 miles a second before kicking the sliced and diced light back up into your face. The science of light works together with the diamond to give you sparkle! So what is sparkle? It is white light (brilliance) and colored light (dispersion) that is combined and returned back up to your eye. What a diamond does with light while it is the proud owner will determine how much is spilled/leaked (either out the bottom or sides) and how much will be returned to you, the viewer.

    For quite a few years now, diamond cutters have known three things: 1) If the table %, crown angles, girdle thickness, and pavilion angles of a diamond are cut correctly, the interior of the pavilion (the ice cream cone part of the diamond) will respond like mirrors and return light back up to the viewers’ eyes. 2) The diamond cutters also know that depending on the shape and position of the outside facets (the ornaments that decorate the Christmas tree) could create intensity kaleidoscope patterns like hearts and arrows. 3) If you shoot enough light into any diamond of any proportions you could make it look decent as long as it stayed in a well-lit environment.

    Where the charlatans took over was when they could take the longest visible wavelength (red), isolate it, increase its magnitude, and give a dead Christmas tree (poorly proportioned diamond) life. First, they put pretty Christmas lights and tinsels on the tree (arrange the facets to create the marketable heart-and-arrow pattern that Madison Avenue could sell to the consumers via Cupid). Others have also tried this lights-and-tinsels trick by creating dozens more facets. As light gets broken up more and more, consumers confuse the difference between more decoration and more sparkle! Do you create more pizza by slicing more pieces on the same pizza? It’s just the same amount of pizza with more SLICES!!! Second, they shoot the dead tree with a bath of red light to influence buyers that it is well-cut because of the presence of a manipulated pattern. Somehow the fact that the appearance of this predetermined pattern can theoretically appear in diamonds regardless of proportions is accidentally omitted in all marketing materials. No one tells you that you can get this with warped diamonds. No one tells you that you can get this with an off-make. Having the presence of this pattern does not ensure your diamond is well-proportioned! Finally, they would turn on a red light, stick it in a heavily lighted box with an instrument sounding name like “Brilliance Scope”, and pretend to measure the sparkle efficiency of the diamond by snapping photographs. Here’s a little question for all who use this equipment as a selling tool. How does this thing work? Apparently, this report is a relative comparison of one diamond to a number of other mystery diamonds. If we have a beauty contest between an ogre, a one-eyed Cyclops, and the wicked witch of the West, the witch may come out on top almost every time! Does this mean that the witch is beautiful? How can we be sure that the mystery diamonds are not ogres or Cyclopes? In the land of the blind, the one eyed man is king.

    Principles of physics and mathematics have not changed—only marketing strategies. Let’s go back to the basics. Tolkowsky and Ditchburn proved to us a diamond’s light can be maximized with correct universal crown angles, universal pavilion angles, total depth percentage, table percentage, etc. (See proportions chart on pages 45-47 in 6th edition of “How To Buy A Diamond”.) A diamond with all the correct proportions does not need any special lighting to tell you it sparkles. Under the right conditions, we can all take a good head shot, but we don’t have to take a shot to the head to realize that any diamond that needs an entourage of red lights and lighted boxes are not going to sparkle on a candle-lit dinner and a long walk on the beach under a silvery moon. Stop letting gimmicks mislead you. Let true science guide you to the light!

    Footnote:

    Visible light hides in a very small region in the electromagnetic field. At one end of the field, we find Gamma rays that travel at wavelengths 10^-6 nanometers (nm) to 10^-2 nm, X-Rays traveling from 10^-2nm to 10nm, and ultraviolet radiation from 10nm to 300nm. On the other side of visible light, we find infrared radiation, microwaves and radio waves. Their wavelengths start at 1nm and extend to 100km. Visible light is a very thin slice of ham squeezed together by two very large pieces of bread. The sun gives us white light (visible light) and a mixture of all the colors. Remember ROYGBIV (red, orange, yellow, green, blue, indigo, and violet)? Each travels at its own wavelength—violet at one end, 400nm, and red (the longest) at 700nm on the other. Indeed, the butcher slices the ham we see very thin!

    by Fred Cuellar, author of the best-selling book “How to Buy a Diamond” and co-authored by Diep Doan

    More questions? Ask the Diamond Guy®

    Posted in Buying Diamonds | No Comments »

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