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

Blue White

    I’ve heard many explanations for the term Blue white. It was used by most US jewelers up until 1947. Many people believe it was a term that described diamonds that came from the Premier Mine which produced diamonds that had a slight tint of blue. This would seem to be the case because the Federal Trade Commision defined it as such. However it was their definition of it that made it an undesireable term. It was afterward considered an unfair trade practice to call a diamond Blue White.       It’s much more likely that the term which was used as a grading term, meant what my father described to me. He was a jeweler who bought diamonds during that earlier period before the Gemological Institute of America brought diamond grading indoors.     He told me that diamond cutters and dealers saved their best diamonds for a clear day and went to a northern facing window. The diamonds that were so free of body color (which was usually yellow tinted) that the blue from the sky traveled through them unaltered were called blue white. White diamonds were therefore stones that had just enough tint to cancel the blue with white light coming from the stone. The reason grading was taken indoors was it was discovered that some diamonds fluoresce in ultrviolet. Most of those that do fluoresce, fluoresce blue. Sunlight has ultraviolet in it and many diamonds were being overgraded.  Today Blue White stones would be called colorless and white stones near colorless.