What Can You Tell From a Diamond Report?

        The answer is both “a lot” and “not much”. The reason is that no two diamonds are alike and no two certificates (or more properly stated “reports” are alike). What you do get from a diamond report is a grading that was made independantly of your jeweler. Though also subjective, it’s bias is to it’s own laboratory not to the person selling the stone. That means that your jeweler should also examine the stone and give an opinion. Without your expert looking at the diamond your are limited to one opinion and a lack of explanation. What you do get is that with experience you have a good idea of what to expect. It really narrows the number of stones you have to look at to find the right one that meets expectations and value.

     The report can fool you a bit as well. Many years ago the diamond was supposed to be looked at through the pavillion of the stone for more accurate color grade and then again from the top for an incidental color grade. That practice is gone and seemingly replaced by ever finer cut grading systems. But light only bends to one angle and the incidental light is not entirely eliminated even in a stone that is cut to exactly the proper angles for brilliance and fire. That incidental light can make a high color grade diamond look yellower than a lower color grade diamond. This is known by cutters and many jewelers but the pressure to just use “paper” (the grading report) is strong in the industry. So much so that  it’s entirely ignored in pricing and never even mentioned by a dealer or cutter except in certain fancy cut stones such as pearshapes.

   A clarity grade does not evaluate the inclusions for their type, only for their grade as determined by that laboratory. Some labs do say what the inclusions are but is a crystal better than a feather better than a cloud? Is the location important? In diamonds of a higher than average clarity grade you need to discuss the inclusions because the report does not explain their effects.  A cloud in the culet can make the whole stone look softer or even hazy. A knot or crystal on the surface can be knocked out. When I’m buying I negotiate on dozens of issues that are or are not touched on in the report but can affect beauty or durability. No two diamonds are alike so the cutting and grading are not exactly identical. You should see diamonds side by side to decide. Buying a diamond is too important and too sentimental to decide by looking at “paper”.

    How well a diamond is cut is the most important aspect of a diamond as far as it’s beauty goes. It’s also important for durability. A diamond cut off-grain is easier to chip than a diamond with the grain oriented horizontally. Light only bends to one angle so even slight variations have an impact. Grades all have ranges and it takes an expert to explain why one stone seemingly the same as another on paper is better. In some cases it will just take looking at them side by side. Sometimes it’s obvious. In general use an expert for this important decision. It’s more than worth it and we’re here for you.

First lessons

My first lesson in gemstone buying was when I was thirteen. I learned about commitment and honor and that a contract wasn’t about a piece of paper. My father had overbooked his time and needed me to pick up a package for him. Dad’s shop was in Milwaukee Wisconsin on second street.  He said I’d have to go to the Pfister hotel and get something from Max Stein. Max was a gemstone dealer I had seen several times before but never really talked to. He reminded me on an impeccably dressed Mr. Magoo. I was given specific instructions on how to go there and how to come back.

    By thirteen I had pretty much walked all over downtown Milwaukee and didn’t think of the streets as good streets and bad streets just which ones were more interesting. I liked walking by the Magic Shop and the Electronics store on the corner, which had neat gadgets in the windows. I walked to the Milwaukee Museum often as a member of the Explorers Club and just like being a Bookworm at my local library you got your card punched each time you went in. A punched card was good for a movie at the museum.

    I had not ever gone to the Pfister alone or with anyone for that matter. It was big  and I thought “ritzy” without even knowing at that time what the Ritz was. I looked around for the elevator and once I headed toward it I felt a hand on my shoulder. “Where are you going?” said the man who was wearing a short jacket with lots of buttons. “To see a man about a horse” I answered using one of my dad’s expressions that he used whenever he didn’t want to tell me where he was going. The man just smiled a few seconds and said “we don’t have any horses here.” So I told him I was going to see Max Stein and gave him the room number. I figured he worked there and the hand wasn’t going away unless I told him. He told me to stay put and went to the phone on a nearby counter. Once he came back he said Max was expecting me and ushered me to the elevator. He even pushed the button for me so I wouldn’t make a mistake like every other thirteen year old he must have known. I knocked on the tall wooded door and Max opened it part way. He looked at me. “Yes your Georges son. We’ve met before.” He said still not opening the door any further. “Do you know why you’re here?” he ask? I said to pick up something. He looked at me and said “Your dad is a very fine jeweler and I trust him with very valuable things. How do I know I can trust you?” With that he opened the door and ask me to come in. I went in but by his stance I knew not to go in all the way. In fact I got about as far as it took for him to close the door. “ Your dad says I can trust you but I need you to make me a promise.”

Up until this point I wasn’t at all nervous. It had really been sort of fun. Even the guy who put his hand on my shoulder and looked like the usher at the theater who checked to make sure you weren’t sitting through the movie twice was just doing his job I thought. Max’s nervousness was catching!

I saw a phone about six feet away and ask if I could call my dad. Max dialed for me because other thirteen year olds didn’t know how to I guess. Dad said to go ahead and promise and then ask to talk to Max. After he hung up Max said dad told him to tell me what I was going to carry. He opened a coin envelope with three stone papers inside. The first one held an emerald. Today I would go on about the quality but even then I was impressed by it’s color and beauty. The second envelope held a ruby. The color of it flashed a memory of way back when I first met Max. I was very young half or less of my ripe old age of thirteen. Max and dad were in the kitchen arguing about the color of a “Pigeon Blood Ruby” Recalling that instance of years before reminded me of three things. First Max carried a penknife, one that all he had to do was push a button and the blade would pop out. Second pigeon blood was a very intense pinkish red when dripped on the snow. And third the black cashmere coat I saw in the closet of Max’s room was the same one I saw going up the ladder to my Grandpa’s old pigeon coup.

“Do you like to be called Charles or do you have a nickname?” Max asks as he was opening the last stone paper. “Dad calls me Charles but some friends call me Chuck.” I responded. “What should I call you?” he persisted. “I don’t care either one.” I said showing my nervousness. He looked at me and said ” This piece of jade is one I brought back from China between my toes.” I knew that meant he smuggled it out of the country. I told him that I had heard he went to China.

“Now” he said “ while putting all the stone papers back in their envelope.” These three stones are worth over $5,000. If you lose them, if it takes the rest of your life you have to promise you’ll pay me back. Shake my hand.” At that moment I found that it’s not just an expression sometimes when your doing something that you’re not even sure your agreeing to do, you do “swallow hard”! Even without knowing the quality I’m pretty sure the value would be over $60,000 today. My gut feeling is that it’s possible the emerald alone could be worth that.

I didn’t take dad’s prescribed route back to the shop. I didn’t meander either. I walked in crowds. I shifted from one group to another until I made it back. When I got back dad was not there yet but instead of going to my bench and sizing rings I went to the cubby dad talked to design customers in and waited. I didn’t relax until dad put the envelope in the safe and called Max telling him all was well. When I ask dad where he went he said” To see a man about a horse.”

A Compliment (sort of) by a Cutter

      At an Independent Jewelers Conference some of the diamond cutters from New York and Antwerp show up and are available to buy from. They are also at the bar at night as we mingle and get to know other jewelers. Georgiann and I were talking with three jewelers from Canada when one of the more important ones walked in. He saw me and came over with his eyes sparkling. 

      ”I have a good story for you” he said. “I had a jeweler from back east come by who travels with you to Antwerp some times. She ask to see my best stones so I showed her a fantastic stone I have. It’s exquisite I told her.  Her eyes lit up but then dimmed and she said something I wasn’t expecting. It is exquisite she said but would Chuck Beaudet buy this stone? “

Antwerp April 2009

         I’m sure that most people would think that diamonds would not be selling well right now. That just is not the case. Diamonds of quality have several advantages during tough times. First they are highly symbolic. Tough times creates strong emotions and strong emotions need a touchstone that defies time. Diamonds are also a commodity of value that has been shown to increase in value. This is especially important for engagement rings which are a promise of the future and for an accomplishment reward as an encouragement to strive.  All of this makes diamonds of quality sought after even in tougher times.

     Antwerp this time is an even brighter opportunity because of  some temporary anomalies I see in the market. Even fine cutters who have a strong customer base have increased competition based on price. My customers know I keep on top of the markets and will do all I can to find the best stone at the best price just for them.

   Since starting at age 12 working for my father I’ve seen several generations while they get engaged, then upgrade, re-design or add to their ring and some as they hand down their diamonds. The emotion that accompanies all of these moves makes me work hard to make the process of buying a diamond rewarding.

      Buying a diamond especially for you in Antwerp is one of those ways that makes it memorable. All it takes is a phone call to 541-484-6548 or a visit. If you have no idea about what you want, come in and get an education that is second to none for our customer. If you’re short on time pick up our Diamonds 101 DVD or find it in Eugene  Springfield on Comcast On Demand. Then let me know what the diamond is for;  such as an engagement ring, a pendant or earrings.  We’ll talk and set parameters based on quality,  size and budget. While in Antwerp I’ll email you with choices describing each stone thoroughly. Or because of the time difference someone from our store can call you. If you choose a diamond for me to purchase you leave a deposit at the store or call with a credit card number and I’ll secure that stone for you. The stones are shipped through customs and arrive a week or so after I’ve returned.  They come directly from Antwerp with love and a Belgian Chocolate. I’m leaving for Antwerp April 24th.

Diamond Prices

If you’ve been to New York recently you may have seen ads for top diamond jewelry stores touting diamonds as a good value and hinting they are an investment. Because of the emotional value diamonds play in our lives, I’ve always resisted using that angle… but so has the industry. Now that highly visible names are using  investment value as a selling point, I found it especially confusing, so I thought I’d investigate a little and see what I can find.

   The rarity of diamonds is something everyone is familiar with. Those who doubt it do not understand the importance of grading. Every gemstone has a point where it is not much more than gravel. A few short decades ago low grade diamond material was used for industrial purposes only. Today you’ll see earrings, pendants, bracelets and even rings where the diamond is the creamy dot in the middle with the bright metal criss-cut around it. Diamonds graded to strict standards are groomed by that grading to at least the rarity they purport. The highest grade of cut equals only about 3% of diamonds. Even those of us jewelers emphasising strict grading and fine cut are struggling to meet our needs without compromise. Rarity does play into the value of an investment.

   Supply and demand are not just buzz words and demand rules even over rarity. The demand for diamonds has increased dramatically over the last few decades. New markets in China and India have especially escalated the desire  for larger diamonds. It’s universal appeal is critically important. Diamond stock piles have been depleted, few new sources have been found and even satellite surveys have offered little hope for continued supplies beyond the next forty years. Currently we’ve seen diamond prices come down about 5% or almost 70% of this years gains,which still leaves a gain at this point. That is a current economic condition and not a signal of any loss of desire for diamonds.

   Industry conditions also have an impact on the value of diamonds but here you have to look close and do a double take to figure it out.  Diamonds are bought and sold in US dollars. With the United States the single largest market you would think that makes sense but other gemstones switched to the Euro a few years ago and the markets found increased demand because if it’s stability. That may also have some dips in demand at the moment but most colored stones are not as “source to consumer” ready as diamonds. Even the beaten down dollar doesn’t have as big of an impact on cost as the fact that the diamond trade is credit heavy. From the cutters to the consumers most of the trade in diamonds is done on credit. This does more than just add to the costs, it also adds to the market vacillations. Spot shortages and occasional dumping occurs.  Short but unpredictable market variations does encourage speculation. I cannot say if speculation adds or detracts from value, but I’m confident no industry will suffer constant downgrading of it’s profits for long and this one goes back hundreds of years. In retail I’ve seen degradation of grading standards and over promising as ways to pump up sales. My belief is that this is a short term fix and it only hurts the true value of the product. Industry conditions are probably neutral. 

   So what I found is not all one way. I’d say it’s good for us in the industry but probably not short term.  For everyone  else… longterm always depends on how long. Right? Right now I’ll continue to believe the real value of the diamond is in it’s magic ability to say something without words.  To those we love now and even in the future. With it anyone can say something directly to our grandchildren or even our great great granchildren. We could not do this without the permanance of the diamond or the value that demands we preserve it. What we say is up to our history, or… at the moment, up to our lives. Value… !

Are there still Blood Diamonds?

      Though it’s believed that conflict diamonds have been kept under the 1% mark for years now it’s seems doubtful that they can ever be reduced to 0%. Any system that spans multiple countries over many continents can never be full-proof. Fortunately the Kimberly Process is most effective in the countries that need our support the most.  Botswana and South Africa are the most diligent in their controls and strictest in their interpretation. These countries have economies heavily reliant on diamond production. Their democracies could not survive without the economy provided by it.Personally I do what I can to support them as well as the cutters and suppliers that are as concerned as I am about conflict stones.  

     Indeed keeping the conflict diamonds at under 1% may prove more trying in the current market. The wealthy in China and India have both increased their wealth and raised their expectations. In China, which has a population of 1,320 million, 40% of engaged women want to have a diamond ring, and their numbers are growing every year.

      Industry experts believe that demand for diamonds on the world market will grow by 5% a year for the next 10 years. They also predict that it will be impossible to raise output before 2015. Currently exploited deposits are heavily depleted, and it will take time to establish industrial production at new ones – especially as most of them are in former conflict zones.

      A current proposal to head off potential loss of control in spite of the Kimberly Process is to control the trading and cutting of diamonds along with the distribution of rough. The recent shift of global diamond cutting from The European Union to India may make this more difficult though the current one year chairmanship of the Kimberly Process has moved to India which has promised to uphold all resolutions of the council.

    What has confused many people is that diamonds are not cut where they are mined. Canadian stones are primarily cut in Russia and African stones in the European Union and India. Distribution points such as Antwerp deal in stones mined and cut all over the world.

    Given the current situation where diamond prices are rising and supply is short. It falls mostly to us further down the chain to remain diligent and use suppliers we trust personally. If I buy in Antwerp I can buy stones directly from a cutter who knows where the diamond was mined. I prefer stones from Bostwana and South Africa. When I buy in the United States I buy from those who care as much as I do and ask the same questions.

What I do in Antwerp

      The comedian Rodney Dangerfield didn’t get any respect and fortunately for his line of work he didn’t expect any. When I show up in Antwerp I get plenty of respect but not the first time I walk in the door of a cutter with my own tools and grade all the diamonds I look at twice over. They really want me to be looser in my expectations and less observant in my grading. I can’t be of course because when buying for my customers I’m obligated to get them not only the best price I can there but also the best stone for the price. That includes avoiding problem stones not just by grade and cut but also by durability.  The cutters really do not want me paying this much attention.

On one trip last year I examined a package where I found many twinned diamonds. So many in fact it exceeded the total number that I’ve seen in over forty years of experience. Something like that shakes you. A twinned diamond is one where one diamond grows through another. In fact it can be several growing through each other. Because a diamond has a grain just like a piece of wood those sections between the strong grain could separate if hit just so.  Scrutinizing the diamonds to this degree takes a lot of time. as the clues for many problems are seen only in the subtle ripples of the polish.

   There are checks and balances in the Antwerp buying experience. Once you choose a stone protocol requires you to wait 24 hours and then confirm you want them. This gives you the opportunity to shop around.  In a typical 8:30 to 5:00 day you could theoretically see a lot of cutters. Because of the time I spend on each stone I rarely make it to more than three. It works out fine for me as most cutters do not offer the exactness of cut that I’m looking for. I see all those I need to.

      On my last trip in three days I saw only two cutters. One I saw four times and one three. The fact that I’m looking for top cut means that sometimes it’s imperative that I get a  Sarin or Megascope report where a laser reads  every facet and angle on the diamond. The machine takes ten seconds. I have one myself and I know, but a cutter will take an hour or more to get a report to you. Selling is all a relationship. After a while this gets faster. In a good relationship you build trust. Fortunately I can double check on the reports when I get home and know which way the relationship is heading. Later in the day and because of the eight hour time difference I spend time checking in with the store and finding out what additional stones I need to locate as well as letting people know what I put aside that day.

    Aside from looking at diamonds for knots, twinning and graining I have evenings to check out the beer, waffels and do some sightseeing. Antwerp is a beautiful town and less than an hour by train from Brussels which is one of my favorite cities in the world. Almost everyone speaks english and getting around is easy.

 All in all it’s a lot of work but a good time and an amazing experience.

Waffels

The new Cut Cards

  Sometimes we seem stuck in terminology that is more confusing than helpful. When talking about the beauty and light performance of a diamond there have been some noteworthy attempts to make things simpler. The new little plastic cards that have a three bar scale describing light performance are an excellent example. They have three bars with a scale that ranges from Low to High or Good to Ideal the bars are usually in the same order, Brightness or White Light for the top bar, Colored Light, Dispersion or Fire for the second and Scintillation or Sparkle for the third.

      I can see there is still room for confusion. What the systems were originally designed for was to help quantify the things we look for in a diamond.

    The brilliance or total light return in a diamond. How much of the light that enters the diamond from typical viewing angles comes out from those same angles. Since some of that light has been diffracted it’s not just white light. This comes predominately from the proportions of the diamond which has it’s own grade.

       We also wanted to determine how much of the light was broken into it’s prismatic colors  or what we call “Fire“. It used to be that we had the notion that Americans liked Fire or colored light and Europeans liked Ice or white light and we allowed grading to encompass both styles. Today I’m not sure if that was not just a way to give cutters more latitude. The aspect of cutting that creates the greatest amount of fire is the symmetry of the diamond which will have it’s own grade.

    The last thing we wanted to measure was the polish of the diamond. It turns out that polishing lines can affect reflectivity and even deflect some of the light that would have entered the stone. Polish has always been graded separately but by using new techniques we have brought it to new levels of measurement. What we call Scintillation  are the flashes off of the stone. Most of these come from the surface and a better polish will give better scintillation. Unfortunately the term seems to have multiple definitions within the industry which can be misleading. 

About Colorless

     Other than size, the rarity of a diamond is mostly dependent on it’s color. Though most people would not be able to detect the difference between a nearcolorless diamond and a colorless diamond of say a half carat or under in most lighting conditions the difference can be dramatic in rarity and therefore cost. When people are balancing Cut (beauty), Color (rarity) and Clarity (which supports both beauty and rarity) to get the most diamond for their money they typically choose beauty first. Since the differences in color are so subtle in the higher ranges (D to G) it seems like an easy and satisfying call to choose the best cut stone over the rarest color.

Why a Weblog

   I decided to write a weblog about diamonds and grading because I continually see so much misinformation out there and I felt people need a place where they could ask questions and get an insight into the business. I’m contacted by news organizations when something happens. What I’ve found is that the information or point of view I provide is only available for a short period and sometimes abrieviated to the point of not making sense. This format will allow me to be clear and include perspective and other sources when needed.

     Please feel free to ask questions about diamonds, diamond grading and terminology. The terms are confusing and very picky but I’ll do my best to help you sort through it all.

Charles M. Beaudet