The Day Before
My father and I were going to New York to have ametting with the manager of DCI New York to see why clients were experiencing unusual delays on the processing of their orders. The meeting should have lasted only thirty minutes…it lasted nine hours.
September 6, 2005
The meeting was at our offices at 579 Fifth Avenue scheduled for 9:00am. We had the whole day for the meeting and whatever (shopping and eating) becuase we weren’t flying back until Wednesday, September 7. I had no idea when I walked into the office my life was going to forever change!
The Meeting
We exchange pleasantries for a while and then I got to the
point of the meeting.
Me: ‘Neil, as you know DCI New York is falling a little behind
in filling all the orders, and we just want to see what’s up?’
(I wanted to say ‘What’s up like the Budweiser commercials but
realized it was a little lame to use a 7 year old bit regardless
of how much I personally loved to say Wazzzzzup?!’).
Long Dramatic Pause’¦’¦.
Neil: ‘Fred, do you know how for 20 years you’ve been telling
people to buy shy?’
Me: ‘Ah huh.’
Neil: ‘Well, they did. And now they’re all gone —
the good quality ones.’
Me: ‘What do you mean they’re all gone?!’
Neil: ‘They are all gone! All the shy stones (.45 ‘” .49 ct,
.65 – .69 ct, 1.45 ‘” 1.49 ct, 1.85 ‘” 1.95 ct, 2.85 ct ‘” 2.95 ct)
are gone, and it’s not only those. All the full sizes over 3
carats are gone. The rough to cut 1.25 ct and 1.75 ct box
radiants are gone. The rough to cut 65/65 princesses in any
size are gone. The 65/65 Asschers are gone! Fred, they’re all gone!’
The conversation proceeded from there. For 9 hours, we tackled many questions. What rough was still available to fill current and future orders? What type of rationing was needed to stretch the current supply of ‘fulls’? A full is a hard weight diamond .50 ct, .75 ct, 1.0 ct, 1.50 ct, 2.0 ct, and rough to cut full sizes was still available. Important note: When I tell you, the reader, that the world is running out of diamonds, again, I am only referring to the good diamonds, not the commercial grade stuff
that consolidators like Costco, Sam’s, Blue Nile, Zales, Bailey Banks & Biddle, Mondera, or Dirt Cheap Diamonds sell. There is no shortage, nor will there ever be a shortage of commercial grade diamonds.
Everyone defines a ‘good’ diamond as a diamond that holds or appreciates in value over time when you try to sell it. Commercial grade diamonds, on the secondary market, sell for only a small fraction of what you paid. That is also the case now for the fancy shapes (pear, marquise, emerald cut, asscher, oval, heart, trilliant, baguette), and melee. They have little or no secondary market value. The three shapes that will hold their value and/or appreciate over time are round, box radiant, and standard radiant. The top price you’ll see for any commercial grade, fancy shaped, or melee diamonds will rarely be a penny more than 19.7% of the original dollar spent. While a good diamond (white, eye clean, Class 1 or 2, non-fluorescent, natural, fully bonded) will always bring you even money (100% of what you paid) as long as the vendor you bought it from stays in business. Even if they don’t, you’ll at least get 40-45% of what you paid as dump value (the average is 60%) or 80-85% on the secondary market to an end consumer who is not looking to flip the rock. There is no question, if you are going buy a diamond, it makes no sense purchasing a crummy one with bogus ‘certificates’ that don’t guarantee you anything. It leaves you holding a piece gravel if you ever want to part with your rock.
Anyway, this is what the market (world) is dealing with. Good diamonds in entire categories are extinct except the onesies and twosies, and what is left could be gone as early as 2010.
Related Article: Bonded Jewelers
