A recent article in Bloomberg Business once again proved that most people, even those who don’t know beans about diamonds, have an opinion about them. In general, the article was a look at increased demands for diamonds by consumers in China and India and the affects those demands have had on prices. All well and good; but I must take exception to the author’s (Thomas Biesheuvel) use of the word ‘quality’ as opposed to ‘rarity’ and his apparent failure to understand the difference between price and worth.
Let’s begin with some observations on what the buyers of diamonds pay for. The author wrote, “Diamonds are ranked by the four C’s: clarity, cut, color and carat weight. In terms of clarity, the highest quality diamonds are classed as flawless or internally flawless. Below that grade, the industry grades stones by their inclusions or blemishes: there are very, very small included, very slight included, slightly included, or SI, and included, or I, stones.” All of this is true, but blind to carat weight and cut as rarity factors. On the average, 80% of a diamond mine’s yield is ‘industrial’, in other words, diamonds that are not fit, for one reason or another (including buyer preferences!) for use in jewelry. Of the remaining 20% only one diamond in 5 can be cut into a gem weighing 1/5 of a carat or more (0.20 carats, ’20 points’ in diamond parlance or for those of you with a metric bent, 0.04 grams); and the rarity of diamonds increases dramatically with increases in weight. If one considers weight alone (again looking at industry averages), a diamond that can be cut into a 1 carat gem is statistically and quite literally ‘one in a million’; and an average of 250 tons of host rock had to be mined, crushed and sorted to find it. A 2 carat gem is statistically one in five million find and no one knows how rare gems weighing significantly more than 2 carats may be. So as any fool can plainly see, one of the things a diamond buyer pays for is the weight of a single important diamond. Of course, here is where cut comes into play. After all, as Mark Twain once observed, ‘Figures don’t lie; but liars figure.’
I can not begin to estimate how often a young woman has come into our shop looking for a ‘1 carat’ diamond; and that makes it pretty clear that weight drives the average diamond purchase. It is, however, a somewhat naive request. When it comes to cutting diamonds, there is a lot of figuring involved. Rough (uncut diamonds) come in a variety of shapes dictated by both the circumstances of their formation and what may have happened to them in the 4,000,000,000 years since the moment of their creation. Optimally, however, an unbroken octahedral crystal (think of a pair of 4 sided pyramids base to base) is the best candidate for cutting into a round, brilliant cut diamond (far and away the brightest of diamond shapes); but there is a hitch. On average the angle between either point of the crystal and the base of the pyramid is about 60º; but if the diamond cutter is to cut the rough gem for the greatest brilliance and sparkle he will polish the angle from its edge (girdle) to its bottom point (culet) to a bit more than 40º and an angle of something between 34º and 35º between the girdle and its top facet (table). In the process he will lose close to half the weight of the rough diamond. The boss probably won’t like that since weight sells. Therefore, as a result of consumer demand, the cut of most diamonds is compromised in favor of weight. This is so prevalent that I once had a diamond cutter friend ask me, “What does a diamond cutter call a 0.85 carat diamond?” In blythe ignorance I replied that I didn’t know. He laughingly rejoined, “A mistake.” A 1 carat round brilliant cut diamond ideally proportioned for brilliance and sparkle should be about 6.45 millimeters in diameter; but the average diameter of a round brilliant cut diamond sold today is smaller. The cutters and their bosses have agreed to ‘figure’ that by cutting to less than ideal proportions (sacrificing some beauty) the rough they are dealing with can become a ‘liar’s carat’. Don’t even get me started on ‘princess cut diamonds’. Suffice it to say that weight for weight, color and clarity being equal, they look 30% smaller than a round brilliant cut; but owing to weight retention, they cost 30% less - another ‘liar’s carat‘ for naive public consumption. Incidentally, I’ve seen top color and clarity diamonds so poorly cut one could have passed for a broken tooth.
That brings us to ‘worth’. In his article Mr. Biesheuvel observed that while the market price for the most rare of diamonds had increased by only 7% over the last year, less rare (he co-opted the term ‘Wal-Mart‘ diamonds to describe them) diamonds had increased in price by 24%. I’ve seen the increase and it is absolutely true; but in observing that Asia’s burgeoning middle classes were somehow settling for less he has erred. After 60 years in the diamond business I can tell you that a diamond is purchased out of emotion. If we go back to the ‘4 Cs’ its clear that they are so rare that to own or give one is more closely akin to a gift or purchase of flowers than it is to a bank account. Their worth derives from the esteem in which they are held; and like Americans, the newly well to do of Asia purchase diamonds to say ‘I love you’ or ‘I’ve made it!’. As a diamond ‘fanatic’, therefore, I would as leaf sell an ‘ugly’ diamond as my favorite florist would sell diseased flowers; so if you are in the market for a diamond to celebrate one of life’s great emotions, you owe it to yourself to come see me. Check out our website, hurstsberwynjewelers.com; then phone us at 708.788.0880 for an appointment with beauty. We’re Hursts’ Berwyn Jewelers. We care, we’re expert and we’ll help you select a beautiful diamond that, 100 years from now, will be ‘Grandma’s diamond’ and a ‘priceless’ family treasure.
P.S. If you have diamonds or broken or unworn pieces of jewelry that you would like to sell, come in and we’ll help you establish their market value; and perhaps, we’ll make the best offer to buy them.
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