The longer you are in the gem and diamond trade, the less you know you know.
In the early days, when I was an apprentice jeweler in London during the day and studied gemology at night, passing my gemology exams with distinction, I was sure that within a few months, or at most a couple of years when I would handle more gems, I would know practically all there is to know about the gem world.
Five years passed by and I was handling and learning about many more gemstones when I realized that there is undoubtedly much more to learn about them. And now, after 33 years, everybody else seems to think that I’m an expert in gems, but I, myself, know that there is so much more to learn about them all and everyday and every new stone may prove that I’m right and teach me something new.
Diamonds prices are accurate in the eye of the beholder or diamonds have no value - they are just a percentage off.
Everybody in the trade is familiar with the leading diamond pricelist. This is said to represent certain prices of diamonds and yet, depending on your position in the trade, these prices may be as much as 50% off the actual price. In fact, most diamond dealers do not talk about actual dollar prices but say, for example: “minus 28%”, meaning that the value of the diamond is 28% off the current pricelist. Others will argue that it is more valuable, only minus 24%.
Somehow nobody seems to mention the actual price - only a percentage off! Can you imagine in your mind walking into a shop and asking the price of a kilo of cucumbers and being answered: “12% off”?
The first gem you meet in a parcel is either the best or the lousiest of the lot!
Please don’t ask me why, but it doesn’t matter what size parcel you are examining, somehow the first gem you pick up is either the best or the lousiest. Never one that actually represents the average price of the parcel.
When I asked a fellow gem dealer if he agreed with this assumption he said yes and continued: “Don’t you know that the first person that you meet in a new city is either the priest or the prostitute?” It took me many years to understand what he meant but since then I have always tried to avoid the priests and the prostitutes of the parcel and concentrate on examining the crowds.
Gems look worse after being purchased by you and much more attractive after you have sold them!
Usually the day after you have purchased an important gem when you know that it is yours, and you examine it carefully devoid of the excitement of the purchase, the stone tends to look slightly less attractive. It is somehow, when not under the influence of the illusions of the gem, that the stone reveals its true self.
However, once you have sold it and it belongs to somebody else, again the stone will acquire all its original charms and illusions.
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You never really know what they mean because, honest to god, nothing could be further from the “same” as what you asked for. Even after a while (30 years in my case) I could not grasp exactly what they meant. Sometimes it means that the buttons are the same and sometimes that it is the same manufacturer, and sometimes it means “you asked for a shirt, these are trousers that look similar...”. But recently I finally got it. Ok, you ask yourself, what has all this got to do with gems?
A few weeks ago, I crossed the street from my office to visit a friend in the Diamond Exchange. He used to deal in gemstones and now, they say, he is very strong in fancy color diamonds. And since we are working very hard to adapt the Gemewizard Color Assessment Module to the colors of diamonds using some consultants within the trade, I decided that I should try to convince such a knowledgeable person to join our team of consultants. So there I was, gazing at many colorful diamonds, from light yellow to vivid yellow, from pink to brownish orange to slightly violet, and a one-carat pinkish reddish diamond quite heavily included, proudly reigned in the center of the display. Suddenly it hit me. I have exactly the same colors in my fancy sapphire production. I asked him to bear with me for a while and rushed to my office to show him my beautiful new production and collection of fancy sapphires. Well, we took a beautiful vivid yellow diamond from his collection and matched it with exactly the same color as my natural yellow sapphires, I asked him how much his gem cost and he answered about $16,000 per carat where my gem cost $550 per carat.
Then we looked at one of his 2+ carat pinks and compared it to the same color 2+ carat gem deep pink sapphire (mind you, my sapphire was deeper and brighter than his diamond.) How much? I asked. He replied around $70,000 per carat. My sapphire was $1,200 per carat. But the big blow to me was his reddish, heavily included diamond. I have the same color beautiful red sapphire in 4 carats and mine is gem clean. People urged me to define it as a ruby but I insist it is a sapphire. Anyway, he asked me how much I want for my 4 carat sapphire and I proudly replied $3,000 per carat. He asked if I would accept $2,500 since he wanted to give it to his wife to celebrate their 12th wedding anniversary. How could I refuse such a request, especially when a husband and wife's relationship was at stake? I accepted.
I asked him how much he wanted for his heavily included ugly reddish diamond. He became thoughtful and said: “Ugly you call it? Well, from you, I want only three hundred for my included red.” I was so glad one of my sapphires was more valuable than his diamond of the same color even though mine was free of inclusions. I decided on the spot to buy it just in order to show it to my customers and prove to them that the same color sapphires may be more attractive than a diamond and more valuable. So I said: will you accept $275. He became serious and asked me how I would pay and I said: “The same way you’ll pay - cash!” He suddenly realized that I had not understood him and said: “I meant three hundred thousand per carat, yes?” and told me a one carat diamond like the sapphire he had just bought from me was sold for $900,000-plus several years ago.
I packed my beautiful sapphires and as I walked back to my office, I kept thinking: “Same, same but different!".
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Call it Murphy’s Law, call it whatever you want but it applies to the diamond and jewelry trade just as it does in every other trade and walk of life. Here are some of the examples I have come across.
Losing in the gem and diamond world is really making money
Gem and diamond dealers are like babies, the more they cry about their misfortune the more they grow (in business). As I asked one of my friends: “How, in the name of all gems, if you lose and lose, did you become so big and rich?” To which he replied that he lost a great deal. “But how can you lose a lot and still look very good?” His simple answer was: “I sold to other dealers who lost even more”. And how are they now, I asked with astonishment: “Oh, they are fine, even richer than me”.
You never have enough of the right size that your customer asks for
No matter how big your production is, and how precisely you aim to fill your customers’ needs, you’ll never have enough of the “right things”. In my early days as a gem cutter, when I used to cut parcel productions of maybe $10,000 in total, and displayed the cut goods to my potential customers they never found enough of the sizes they were looking for in my parcel. At those times I longed for the days when I would produce enough so that a customer would find all his needs fulfilled with my goods.
And then I grew and started producing productions of say $50,000 at a time, cutting many beautiful stones, waiting in anticipation for my customers who looked at my parcels and still did not find all they needed and asked for goods I did not have. And then with God’s help and some luck I reached the stage today where I am producing really large parcels with practically all sizes and shapes which I show to my customers. They, of course, never find enough of what they are looking for.
The further you are from the source the bigger the discount you get and the longer the terms of payment
In the mines, close to the digging place of gems you always, but always, have to pay cash and rarely get more than a few percent discount. In the cutting centers, such as in Bangkok and Jaipur, you may ask for 30 days terms but still get only a real 10 - 20 percent discount. In the consuming countries your business customers will demand 90-120 days terms and 30 percent discount. And finally to the actual consumer in the shop where the goods are sold at a 50-80 percent discount and with very long term credit, some even give the buyer mileage points.
I am still trying to figure out this phenomenon, because using my poor judgment, one is better to buy gems as a private customer, and sell it to the mines. He or she will get a better price and have the money way before payment is due. And then I remembered Einstein and his theory of relativity...
And last, but not least: the beauty of gems is not necessarily in the eye the beholder.
IDEX MAGAZINE | NO 183: GEMS
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It is fascinating as a gem and as a gem product. I fell in love with the stone on my first encounter with it in the early 1970s when it was brought by a customer to my gem lab. I don’t really care in what color it is normally found in nature (brown) and that a short and not very sophisticated heating process turns it into beautiful blue.
This gem has sent me for the last 30 years, for months on end, to Kenya and the mines in the Merelani hills in Tanzania where conditions used to be terrible in the early days, buying in the bush from the Masai miners and exporting it to the west.
I spent years trying to refine my tanzanite heating process, including a custom-made computer-controlled oven with many stages and properties, only to find, fairly late in life, that my gem behaves best when cooked on a fire or gas stove packed in a cigarette paper.
The history of tanzanite begins in the late 1960s when Christie’s introduced this fine stone to the international market by launching a campaign. The stone was accepted with great enthusiasm and fetched very high prices, well over $1,000 a carat for fine, large pieces. But due to unstable supplies, the market was limited mainly to collectors.
When we first arrived with calibrated tanzanite in the US market in the late 1970s, many dealers were reluctant to look at this soft gem. One even told me that the gem was so soft (6+ on the Mohs scale of hardness) that it can crack even if one sneezes on it, which is a gross exaggeration, but come to think about it, not so far from the truth. I once had a 15 carat gem that lost its corner when I accidentally dropped it on the table. (Don’t try it at home!)
The 1980s saw a surge of supply from the mines, which resulted in greater recognition and appreciation of the stones. By the late 1980s, supply and demand were both high. Prices were reasonably low resulting in many designers using this remarkable stone as a centerpiece for their jewelry. The 1990s saw the golden era of tanzanite as a commercial product.
Outstanding tanzanites were used for fine quality jewelry, but on the other hand, inferior qualities of tanzanites, pale or too violet, which were once considered to be too poor for use in jewelry, are quite commonly used today. Parcels of tanzanite cut in calibrated sizes are in high demand.
One should not forget that a fine blue tanzanite of 10 carats could cost today about $5,000-$10,000 a piece, whereas a similar color of sapphire weighing 10 carats could cost anything between $30,000- $100,000 a piece. Because color is so dominant in jewelry today, big, colorful, sapphire blue, natural stones at a reasonable price is only feasible using tanzanite.
In 1997, for no apparent reason, the price of tanzanite collapsed with the gems dropping in value by the day. This caused many people, including your humble servant, to lose lots of dollars because of his love for, and loyalty to, the gem. They say it was a flood of gems from the mine. The prices were down for two years, then from mid-1998 up to mid-2001 they rose sharply, bluing many jewels and reigning over many TV shopping evenings.
And then came 9/11 and the false rumors that the gem was generating funds for terrorists... and the prices died for a couple of years. Since then new players have been in the market, some trying to stabilize the market and create some kind of a controlled environment.
Let’s not forget that tanzanite does not have the 1,000 year history and record of sapphire, hence it is more sensitive to changes. However, I believe that the fact that there is only one locality in which the stone is found, coupled with the relatively small supply, and the ever-growing demand and interest of the world market, and the fact that the Holy Bible mentioned only one big flood, tanzanite’s place in the gem-world is secured for many years to come.
As for myself, my love for the gem is as strong today as the first day I set eyes on it...
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In our European Gemological Center, we hear on almost a weekly basis stories along the lines of: “This is a rare gem that has been in my family for centuries” or “My great, great, great-grandfather sold two large factories in Persia and got this gem for it”. Sometimes we are flushed with immense excitement prior to opening the parcel in which these gems come when a customer describes to us a red diamond the size of his fingernail (and most have big fingernails) that has been in the possession of his family for generations, only to find out, a few minutes later, that he has a nice piece of garnet worth a few dollars...
Sometimes we end up with tears in our eyes when told a heartbreaking story of a family walking in the desert for months with a gem hidden in the children’s clothes - “a stone that was in the possession of a famous rabbi centuries ago”. We in the lab know that just by touching it we are going to be blessed forever, only to find out that the holy gem is a fairly newly cut (40-50 years old) synthetic Veneuil ruby worth nothing.
So you may ask yourselves: How come, after all these years that we have been in the gemology business and the thousands of imitations and synthetics that have passed through our hands we are always very excited every time we receive a phone call of such stories of gems.
Several years ago I received a call from an old lady who insisted on talking to me and only to me. She said that she had seen my two-volume book about gems in a shop and I probably understood gems well. I thanked her for the compliment and asked her if this was the only reason she was calling. She replied: “No, I have a green stone and red stone that my grandfather received when he sold his land and house in Russia many years ago” (sound familiar?)
When I asked her to come and have them checked in the lab she said she was too old to travel and that she hated Tel Aviv. I did not want to start explaining to her that we are actually situated in Ramat Gan (next to Tel Aviv) and asked her to describe the stones to me to which she said: “One is the size of an old half Israeli Shekel coin and the other is a bit larger. My father told me that his father said that one is “Smarugt” and the other “Rubit”, one changes color like a lizard and the other glitters like red clean glass on fire”. Anyone who knows the old Israeli coins realizes that the lady was talking about large gems, and anyone who knows anything about gems knows that she probably meant alexandrite and ruby. And anyone who knows about “glittering old clean red stones knows that they are for sure, glass or synthetics and since when can an alexandrite of this size be hidden in Israel, in an old lady’s home for so long?
I explained to her that the gems that she was describing were most likely to be imitations, because alexandrite and ruby of these sizes are so very rare and that I never leave the lab to check gems on house-calls. To which she replied: “Do you think my grandfather was an idiot?”. I ended up packing my microscope and small portable lab and visiting her little lovely house.
To cut a long story short. The “Smarugt” ended up to be a fantastic more than 20 carat natural alexandrite. And the ruby was a native cut Burmese ruby, natural and unheated. Two top quality gems.
When she asked me how much I thought they were worth and I told her, she was not amazed at all and although the gems were worth several times the price of her house she just looked at me and said: “I knew he was a clever man, now I can buy my grandson a flat.”
I have promised to her not to disclose to anybody the value of these gems. Curious readers should look into prices given for such gems in recent auctions if you are keen to know the value. And as for myself, I learnt again the first rule of gemology, not all that glitters is synthetic, and you really never know...
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