Monthly Archives: September 2015

Sea Shells and Diamonds

ConchShell

As I was packing up my house recently, preparing to move, my daughter came across a beautiful Conch shell that she found on the beach in Captiva, Florida when she was young. Captiva is known for its beautiful shells.

She was admiring her beautiful shell when it occurred to me that finding a beautiful sea shell in a place that is known for its shells is much like finding a beautiful diamond.

In the world of diamonds, there are thousands of diamonds available on the Internet.  If there is one thing that I know after a lifetime of 40+ years in the wholesale diamond business, it is this: Finding a beautiful diamond is much harder than finding a beautiful Conch shell!

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Recently I was evaluating the diamonds that I purchase for my “wholesale diamond stock”. I realized that for every thousand diamonds that I look at –  99% of which are certified by the GIA (Gemological Institute of America),  –  there are perhaps 20 that I purchase.

It is not a question of what the GIA report might say in terms f the diamond quality. It is a question of finding that rare diamond that you just look at and say, “WOW!’

A “WOW!” diamond is something that is truly amazing. You just want to look at it because its facets and its scintillation draw you in.  It is a work of nature and a very talented diamond cutter. It is one of the most spectacular things in the world. It is something incredibly beautiful.

It is very rare – even in a world filled with databases of many thousands of diamonds.

So, you might ask, “What is my point?”  In the sea of many thousands of diamonds (Internet diamond databases), one must understand that there are diamonds that are truly exceptional and the other 99%. Buying a diamond from an internet database – particularly the lowest priced diamond – is cheating yourself of the beauty of what an engagement diamonds supposed to be.

Maybe you think that an engagement diamond is just something that you “have to do” because it is an “expected” part of the engagement process.  This may be true to some extent. But it is something that will look at every day for many years. It should also be an investment in something that is truly spectacular.

 

 

NEIL REIFF

Buying a GIA Fancy Shape Diamond – BUYER BEWARE.

BUYING A GIA FANCY SHAPE DIAMOND – BUYER BEWARE.

Buying a Fancy Shape diamond – the term used for an Oval, Cushion Cut, Emerald Cut, Princess Cut, and all other non-Round diamond shapes – based solely on the GIA grading report is not well-advised.   Though there is much information contained within any grading report, none of this information conveys any clues as to what any particular fancy shape diamond looks like.

Today I came across two diamonds of similar GIA specifications – the same carat weight, same GIA color grade, and the same GIA clarity grade.

It has been said that a picture is worth a thousand words. So . . here it is in pictures.

aa3.06 Ivs2 CUSHION

This is a actual un-retouched photo of a 3.02 Carat Cushion Cut diamond, GIA “I” color, GIA “VS2″ clarity.

aa3.02Cushion IVS2

This is an actual un-retouched photo of a 3.06 Carat Cushion Cut diamond, GIA “I” color, GIA “VS2″ clarity.

As you can see, a picture is also worth thousands of dollars! That is the difference between buying something that is beautiful and wasting money on something that is not pretty at all.

In the photos one can easily see that one diamond is beautiful. It is my opinion that the diamond pictured in the above photo is ugly! Live and in person, I assure you that the difference is even more apparent.

From looking at the two certificates, other than the fact that one diamond is more square and the other more rectangular (which has nothing to do with the issue at hand), one would never see the difference in beauty between these two diamonds simply by viewing the GIA certificate.

The simple truth is that one is just a beautiful diamond. The other is not. This is not determinable by looking at the certtificate.

To be honest with the reader, the diamond in the above photo is priced 10% less than the diamond in the lower photo. In my opinion, the nicer diamond is worth a 1000% more than the other.

Some might think that saving 10% on a diamond is important. But when one diamond is 1000% more beautiful than another, think about this . . .

What diamond do you want to look at for the rest of your life?

What diamond quality do I really need to buy?

What quality of diamond do I really need to buy?

If you expected an easy answer to this question I am sorry to have to disappoint you.

In everything in life, whether it is the purchase of an automobile or a house, we all start out with wanting our “dream” car or our “dream home”. In most cases, we make sacrifices when faced with the reality that our dream waterfront or mountainside home is beyond our financial reach. Such is life. And, in most cases, such is the search for the “perfect” diamond.

By this point in your search I assume that the reader is familiar with the Four “Cs” of a diamond: the Carat (weight), the Cut (this applies to shape as well as cut proportions), the Color, and the Clarity. Each of these factors significantly affects the “cost” of a diamond. This is true whether one is, like me, a wholesale dealer or a retail consumer.

The most significant factor of the “Four C’s” is the carat weight. Unlike going to a supermarket where one buys a 16-ounce (1lb) prime steak for $15.00 and a 32-ounce (2lb) prime steak for $30.00, the price of a larger diamond increases exponentially. For instance if a hypothetical 1.00 carat costs $10,000.00 that same diamond would cost approximately $20,000.00 if it weighed 1.50 carats. This diamond would cost approximately $35,000.00 in a 2.00 carat diamond. Conversely, this diamond would cost only about $4500.00 in a 0.75 carat diamond and a 0.50 carat diamond approximately $2500.00. The reason for this is twofold. On one hand, diamonds are priced per carat so the weight differential is part of the reason. On the other hand, each diamond is a rare natural gemstone and larger diamonds are much more rare than a smaller diamond.

As for the “Cut”, this is also a difficult factor to explain. It entails two different things. Firstly, there is the shape of the diamond – Round Brilliant, Oval, Cushion Cut, Princess Cut, Radiant, Emerald Cut, etc. There is also the factor of depth and table measurements and facet angles and other considerations. Because each diamond starts out as a “rough” diamond unearthed in a mine, the final price of a diamond is affected by the “return yield” of the rough diamond compared to the weight of the finished diamond. Because more rough diamond is lost in the cutting of a Round Brilliant diamond as opposed to all other shapes, a Round Brilliant diamond is usually the most expensive shape.

The final two C’s are much more esoteric and difficult to understand. These involve the “color” and “clarity” of a diamond. As previously stated, diamonds are a work of nature and each diamond is a unique creation. This being the case, diamonds can be absolutely colorless or they most likely will have some degree of “less white” or in some cases may have a slight or apparent tinge of yellow. It is believed that a whiter diamond is more beautiful than a diamond that has some tinge of yellow. For this reason, whiter diamonds are more expensive and more sought after than a more yellow diamond.

As for clarity, diamonds being the natural creation that they are, practically every diamond is naturally formed in a “less-than-perfect” molecular structure. If a diamond were a perfect molecular structure it would be a perfectly clear crystal. Although this is just a guess, I would say that this happens less than one-in-a–gazillion times. In practically all diamonds there is some kind of flaw or inclusion or imperfection – as is true with many things in life! Most diamonds are very much included and have many imperfections. It is the diamond that has very few and minor inclusions that become an engagement diamond (as opposed to being used for industrial usage).

In recent years, the Gemological Institute of America has established criteria that has become the cornerstone of diamond grading with relation the color and clarity of a diamond.

GIA-color-chart-copy-copy

GIA-ClarityScale

As you can see from the charts above, GIA grading terminology distinguishes twenty-three (23) grades of diamond color and assigns alphabetical color grades beginning with “D” through “Z”. The color “D” represents absolute white color with each subsequent color being slightly less white. Furthermore, GIA has assigned five general categories to its letter grades.

In its clarity grading system, GIA has distinguishes 10 clarity grades. These clarity grades range from IF (Internally Flawless) and continue though a continuum to “I3” (Imperfect, eye visible inclusions).

I do not mean to be disrespectful of the Gemological Institute of America (GIA) for I am a graduate of this esteemed institution. However if one considers all the possible combinations of GIA color and clarity grades there are two hundred and twenty (220) possible combinations of color and clarity. Diamond grading, in my opinion, is ridiculous and overdone.

As a consumer, one might think that there is a science to all this. One might also think that there are significant differences between each color grade and/or clarity grade. I can tell you as a fact that I have known of several diamonds that have been submitted to GIA and have received different grades on separate GIA reports. I had a recent experience in which the same diamond was submitted twice to GIA and received a grading combination that was three grades different in color and one grade different in clarity on the GIA grading report. The same diamond!! Yes, this is an unusual occurrence but it is true.

Sometimes I think the world made more sense when one purchased a diamond based on the “beauty” of a diamond as determined by one’s own eyes and the trust of the local established jeweler rather than on a piece of paper issued by a grading laboratory!

So, where does that leave us today? We are in a world where the consumer in many cases is not buying a diamond – they are buying a piece of paper. And we are also in a world where we all want the best of everything. So, naturally, when we are buying a diamond we go into this thinking that we must have a “D” color, ‘IF” or “VVS” clarity because that is the best (and we all want the best!).

Yes, a “D”-“Flawless” diamond is the best. And yes, a diamond with a color grade of “M-N-O-P” is going to be somewhat yellower in color than a “D” color diamond. Yes, a flawless diamond will be brighter and more sparkly than a diamond that has a clarity grade of “I2” or “I3”. But there are many grades in between “D”-“FL” and the lower parts of the scales that are exceptionally beautiful diamonds.

If you look again at the GIA grading scales above you will see that there are significant yellow tones in the higher alphabet letters that represent the color grades. You will also see that the difference between “D” color and “I” are, in reality, very subtle and insignificant. Although harder to see on this chart, the difference between a “J” color and an “M” color are much more apparent. And, believe me, I have seen some “M” color diamonds that are very beautiful and look white. In fact, if you knew what most people out there have in their engagement ring you might be shocked!

The same can be said with regard to the GIA clarity-grading scheme. Yes, there is a significant difference between an “IF” and an “I2” or an “I3”, but once again, look at the examples as provided on the GIA grading scale above. The difference between a ‘SI” grade and an “I1” or “I2” grade is much more significant than the difference between “FL” and “VS2”.

It should be remembered that diamond clarity grading deals with degrees of inclusions visible under 10X magnification. Obviously a flawless diamond (which as previously mentioned is a one-in-a gazillion) has no inclusions that can be found under magnification. But the differences, by definition, between “VVS” and “SI” is the difference between an inclusion that is “very, very slightly included and difficult to see” and “somewhat easy to see” under 10x magnification!! Yes, the “I1”,”I2” and “I3” grades are much different. These diamonds usually have inclusions that are seen without magnification and, in many cases (especially “I2” and “I3”), the inclusions affect the overall brilliance and sparkle of the diamond and these diamonds may be lifeless and not beautiful at all.

At this point it is necessary to look at this information in the context of price. A 1.00 carat “D-Flawless” Round Brilliant diamond is priced at approximately $27,500.00 on the wholesale diamond market. A 1.00 carat “F-VS2” Round Brilliant diamond is approximately $10,000.00. The same Round Brilliant 1.00 carat diamond in a “H-SI1” is approximately $7,500.00. FYI, this 1.00 Round Brilliant diamond in a “M-I3” grade is priced at approximately $1200.00!

To put these different prices into further perspective, recall the discussion above about the affect of the diamond size with regard to price. Quite simply, a “H-SI1” grade 1.00 carat Round Brilliant costs approximately $7500.00. The same grade diamond will cost $25,000.00 in a 2.00 carat diamond. To change it up a bit, a 1.00 “F-VS2” Round Brilliant diamond will cost approximately $10,000.00. It would cost approximately $38,000.00 in a 2.00 carat diamond! It should be noted that most diamond buyers tend to lower their quality “standards” as their desired size requirement increases.

Buying a diamond is a matter of balancing. One must balance size, color, clarity and – most importantly – price. I have many times looked at a prospective diamond buyer who comes in with “Pie in the Sky” requirements for what he or she “needs” and I have asked, “Who do you need to impress?”

A diamond is something that you buy for someone that you love. It is often purchased at the beginning of a long-term commitment that one makes as a symbol of one’s love and a commitment to another. Yes, you want to purchase a beautiful diamond. I would hope that you get good honest advice from a knowledgeable jeweler. But keep in mind that there are beautiful diamonds in this world that are not “D-IF”. Also keep in mind that your loved one and family and friends will not be using a magnifying glass when they admire your loved one’s diamond engagement ring.

For what it is worth, I get my diamonds for a wholesale price. My wife has a diamond that is an “I” color and “SI” clarity. When I see it on her hand it is not yellow at all. Under normal circumstances, it has as much fire and brilliance as a “D” color, “Internally Flawless”. With forty-plus years of experience in the diamond and jewelry industry, I know it is a beautiful diamond but most importantly, she thinks it is too!!

Diamonds: Quality vs. Price – The 50% question??

Today, more than ever before, there is a significant difference in diamond pricing between GIA graded diamonds of similar GIA grades. Within the diamond trade, this is often referred to as the difference between a “good” GIA report and a “bad” GIA report. Though two diamonds may be graded as “H/SI1”, one may be an exceptionally beautiful diamond and the other may contain a big black carbon inclusion located in the center of the table.

I evaluate several hundred diamonds with GIA grading reports every week. Some are priced at 45%, and 50% discounts.  On the other hand, the “nicer” diamonds are priced at 20% – 30% discounts. On a 1.00 carat Round diamond, GIA H/SI1, the difference in actual dollars is $4875.00 (wholesale) for the nice diamond as opposed to $3250.00 (wholesale) for the “cheaper” diamond. Quite simply, the nicer diamond is 50% more expensive than the other.

These are diamonds with the same GIA grade with a 50% pricing differential!!

This pricing differential among diamonds of the same GIA grade is even more extreme when dealing with fancy shape diamonds – Emerald Cut, Cushion Cut, Ovals, Radiant Cut and others. Some fancy shapes may trade at discounts of 50% to 60% or more. Other well-made fancy shapes may trade at a discount of 20% or less. In the case of a beautiful Oval or an ugly Oval of the same GIA grade, the difference in actual dollars can be significantly more than 50%!

I recently  viewed a parcel of 1.00 carat round diamonds costing $600.00 (wholesale) per carat. On the other hand, a 1.00 carat Round D/Flawless diamond trades for $17,000.00 (wholesale). In this instance, one 1.00 carat Round diamond is 2800% more expensive than another!! Obviously, the $600.00 1.00 carat diamond is 1000% ugly junk. It has no beauty other than a “cheap” price which may be beautiful to someone. The 1.00 carat D / Flawless diamond is something that is spectacular – a magnificent work of nature!

As a wholesale diamond dealer, I, as well as the diamond industry as a whole, am faced with a dilemma. We are living in an internet world where everything is being reduced to the lowest common denominator – that of price. There are many who only understand “price” and do not understand “value”. The Internet is wonderful for these buyers who care nothing about the beauty of a diamond..

On the other hand, as a professional within our industry, it is my belief that it should be our mission to provide expertise and knowledge – and, most importantly, to assist a fine jewelry buyer in purchasing a beautiful diamond.

I understand that a D / Flawless diamond is extraordinarily  expensive – and much finer than what a typical consumer should purchase. I also know that price point diamonds are nothing more than price-point garbage that have no real beauty or value.

There are many beautiful diamonds that fall within the spectrum in between low price garbage and exceptionally fine.

A reputable diamond merchant and/or a fine jeweler understands this. His mission should be to guide a prospective buyer to understanding and appreciateing the value of a beautiful diamond or fine diamond jewelry. It should also be his purpose to assist a prospective buyer in acquiring something that will always be valued and appreciated for its beauty and magnificence.

I have a quotation on my wall above my desk in my office that says it all:

LettingYourCustomersQuote