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Business/Finance See other Business/Finance Articles Title: Have You Ever Tried to Sell a Diamond? Why They Are Not a Good Investment This is a long article (seven pages) so I am not inclined to post all of it here but here is the first page. If you want to read it all, and it is fascinating, the link will take you to the article. (J D) The diamond invention—the creation of the idea that diamonds are rare and valuable, and are essential signs of esteem—is a relatively recent development in the history of the diamond trade. Until the late nineteenth century, diamonds were found only in a few riverbeds in India and in the jungles of Brazil, and the entire world production of gem diamonds amounted to a few pounds a year. In 1870, however, huge diamond mines were discovered near the Orange River, in South Africa, where diamonds were soon being scooped out by the ton. Suddenly, the market was deluged with diamonds. The British financiers who had organized the South African mines quickly realized that their investment was endangered; diamonds had little intrinsic value—and their price depended almost entirely on their scarcity. The financiers feared that when new mines were developed in South Africa, diamonds would become at best only semiprecious gems. The major investors in the diamond mines realized that they had no alternative but to merge their interests into a single entity that would be powerful enough to control production and perpetuate the illusion of scarcity of diamonds. The instrument they created, in 1888, was called De Beers Consolidated Mines, Ltd., incorporated in South Africa. As De Beers took control of all aspects of the world diamond trade, it assumed many forms. In London, it operated under the innocuous name of the Diamond Trading Company. In Israel, it was known as "The Syndicate." In Europe, it was called the "C.S.O." -- initials referring to the Central Selling Organization, which was an arm of the Diamond Trading Company. And in black Africa, it disguised its South African origins under subsidiaries with names like Diamond Development Corporation and Mining Services, Inc. At its height -- for most of this century -- it not only either directly owned or controlled all the diamond mines in southern Africa but also owned diamond trading companies in England, Portugal, Israel, Belgium, Holland, and Switzerland. De Beers proved to be the most successful cartel arrangement in the annals of modern commerce. While other commodities, such as gold, silver, copper, rubber, and grains, fluctuated wildly in response to economic conditions, diamonds have continued, with few exceptions, to advance upward in price every year since the Depression. Indeed, the cartel seemed so superbly in control of prices -- and unassailable -- that, in the late 1970s, even speculators began buying diamonds as a guard against the vagaries of inflation and recession. The diamond invention is far more than a monopoly for fixing diamond prices; it is a mechanism for converting tiny crystals of carbon into universally recognized tokens of wealth, power, and romance. To achieve this goal, De Beers had to control demand as well as supply. Both women and men had to be made to perceive diamonds not as marketable precious stones but as an inseparable part of courtship and married life. To stabilize the market, De Beers had to endow these stones with a sentiment that would inhibit the public from ever reselling them. The illusion had to be created that diamonds were forever -- "forever" in the sense that they should never be resold. In September of 1938, Harry Oppenheimer, son of the founder of De Beers and then twenty-nine, traveled from Johannesburg to New York City, to meet with Gerold M. Lauck, the president of N. W. Ayer, a leading advertising agency in the United States. Lauck and N. W. Ayer had been recommended to Oppenheimer by the Morgan Bank, which had helped his father consolidate the De Beers financial empire. His bankers were concerned about the price of diamonds, which had declined worldwide. In Europe, where diamond prices had collapsed during the Depression, there seemed little possibility of restoring public confidence in diamonds. In Germany, Austria, Italy, and Spain, the notion of giving a diamond ring to commemorate an engagement had never taken hold. In England and France, diamonds were still presumed to be jewels for aristocrats rather than the masses. Furthermore, Europe was on the verge of war, and there seemed little possibility of expanding diamond sales. This left the United States as the only real market for De Beers's diamonds. In fact, in 1938 some three quarters of all the cartel's diamonds were sold for engagement rings in the United States. Most of these stones, however, were smaller and of poorer quality than those bought in Europe, and had an average price of $80 apiece. Oppenheimer and the bankers believed that an advertising campaign could persuade Americans to buy more expensive diamonds. Oppenheimer suggested to Lauck that his agency prepare a plan for creating a new image for diamonds among Americans. He assured Lauck that De Beers had not called on any other American advertising agency with this proposal, and that if the plan met with his father's approval, N. W. Ayer would be the exclusive agents for the placement of newspaper and radio advertisements in the United States. Oppenheimer agreed to underwrite the costs of the research necessary for developing the campaign. Lauck instantly accepted the offer. In their subsequent investigation of the American diamond market, the staff of N. W. Ayer found that since the end of World War I, in 1919, the total amount of diamonds sold in America, measured in carats, had declined by 50 percent; at the same time, the quality of the diamonds, measured in dollar value, had declined by nearly 100 percent. An Ayer memo concluded that the depressed state of the market for diamonds was "the result of the economy, changes in social attitudes and the promotion of competitive luxuries." Although it could do little about the state of the economy, N. W. Ayer suggested that through a well-orchestrated advertising and public-relations campaign it could have a significant impact on the "social attitudes of the public at large and thereby channel American spending toward larger and more expensive diamonds instead of "competitive luxuries." Specifically, the Ayer study stressed the need to strengthen the association in the public's mind of diamonds with romance. Since "young men buy over 90% of all engagement rings" it would be crucial to inculcate in them the idea that diamonds were a gift of love: the larger and finer the diamond, the greater the expression of love. Similarly, young women had to be encouraged to view diamonds as an integral part of any romantic courtship. Since the Ayer plan to romanticize diamonds required subtly altering the public's picture of the way a man courts -- and wins -- a woman, the advertising agency strongly suggested exploiting the relatively new medium of motion pictures. Movie idols, the paragons of romance for the mass audience, would be given diamonds to use as their symbols of indestructible love. In addition, the agency suggested offering stories and society photographs to selected magazines and newspapers which would reinforce the link between diamonds and romance. Stories would stress the size of diamonds that celebrities presented to their loved ones, and photographs would conspicuously show the glittering stone on the hand of a well-known woman. Fashion designers would talk on radio programs about the "trend towards diamonds" that Ayer planned to start. The Ayer plan also envisioned using the British royal family to help foster the romantic allure of diamonds. An Ayer memo said, "Since Great Britain has such an important interest in the diamond industry, the royal couple could be of tremendous assistance to this British industry by wearing diamonds rather than other jewels." Queen Elizabeth later went on a well-publicized trip to several South African diamond mines, and she accepted a diamond from Oppenheimer. In addition to putting these plans into action, N. W. Ayer placed a series of lush four-color advertisements in magazines that were presumed to mold elite opinion, featuring reproductions of famous paintings by such artists as Picasso, Derain, Dali, and Dufy. The advertisements were intended to convey the idea that diamonds, like paintings, were unique works of art. Poster Comment: One of the better comments posted about the article: David Blum • 11 months ago − Let's imagine diamonds and gems never existed. People invented the wheel, used fire, eventually had the industrial revolution. And I come to you as an investment banker. I tell you I've got a brand new product. Just a few ounces of it is worth thousands all (sic) dollars. Investor banker: What is it? Me: It's a shiny rock!! One the size of my thumb is worth 100k!! Investor banker: What does it do? Me : it's very shiny. Investor banker: Can I access the internet with it? Me: It's a rock. A shiny rock. Investment banker: Pass. 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#1. To: James Deffenbach (#0)
Diamonds are pretty much worthless. A uterus on the other hand in the open market is worth about $1K. So as a rule of thumb, never pay more than a Grand for a Uterus.
Great commentary - thanks.
“The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.” ~ H. L. Mencken Except if they're insured. ORLANDO, Fla. (WOFL FOX 35 ORLANDO) - Orlando police are investigating what could be a simple car burglary, or an elaborate diamond heist. The call came in during the 7 p.m. hour on Monday at the Sweet Tomatoes restaurant on the corner of International Drive and Kirkman Rd. "They met with the victim. He described that his car had been broken into. Showed where it had been broken into, and there was a bag missing," said Orlando Police Sergeant Jim Young. "The victim stated that the bag contained about $400,000 worth of diamonds." Young said the kind of crime is common, but what was taken, is not. "Vehicle burglars look for opportunity. In this case, there was opportunity of a bag sitting on the seat, so obviously the criminal took that opportunity and took that bag," he said. "We're going to determine the facts of the case and go on the facts of the case from there. We're not going to rule anything out, in any case, and we're going to look at every option." They were able to collect some evidence from the scene. "We're going to fingerprint as much as we can. We're going to look for surveillance in the area. We're going to talk to anyone that might have been in the area. We usually re interview the victim as well." The victim in this case is a 47-year-old man from New Jersey. It is not clear why he had diamonds in his possession, or why he did not take them inside the restaurant with him while he was eating. "Mr. Prime Minister, there is only one important question facing us, and that is the question whether the white race will survive." -- Leonid Brezhnev to James Callahan
Diamonds have always been over-priced. ;) "When bad men combine, the good must associate; else they will fall, one by one." Edmund Burke
This is key to the whole charade. ;) "When bad men combine, the good must associate; else they will fall, one by one." Edmund Burke
I would say that the man is perpetrating a scam. Would you leave a bag of diamonds on the seat of your car? Even if you needed to leave them in the car for some reason, would you not have put them in the trunk and be sure you took the keys with you? This story reeks. This is key to the whole charade. ;) Yep, I agree with you. You're welcome. This scam is too lame for words.
“The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.” ~ H. L. Mencken Me: It's a shiny rock!! One the size of my thumb is worth 100k!! Investor banker: What does it do? Me : it's very shiny. Investor banker: Can I access the internet with it? Me: It's a rock. A shiny rock. Investment banker: Pass. me: BUT IT SHINES! How can you not see this? Have you not seen twilight? This new shiny rock is gonna be the biggest thing ever! Banker: Security! ___FIRE
So as a rule of thumb, never pay more than a Grand for a Uterus. Sounds a bit high to me. I think you are right, but for a brand spanking new ones a lot of guys would pay much more, chumps, and tools in my book.
Yeah, mine too.
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