Coincidentally, watched the episode about diamonds in this series a couple weeks ago. Covers many of the same point as have been brought up here:
I know it’s the popular opinion around here that everybody else is a sheep-like rube and easily tricked by the silliest marketing, but it’s just not that simple.
They make an excellent abrasive. My diamond grit files were worth every penny (and not particularly expensive, anyway).
It’s too bad we don’t yet have a process for manufacturing large single-crystal diamonds. They would make an excellent semiconductor substrate, and have wonderful heat conductivity. They would likely do well as phone or watch faces as well, though their brittleness might be their downfall.
Diamond is a far more useful material than gold. Even if we had an infinite supply of gold, it would still be used for hardly anything–it’s too soft to be a real structural component, and its electrical characteristics aren’t great either. It makes a good non-corroding coating, but that’s about it. Diamond in comparison has many possible uses. Fortunately, there’s also nothing in principle stopping us from manufacturing diamond a cubic meter at a time.
But a good test of whether something is a sound store of value is the bid-ask spread among professional dealers. For pure gold, the bid ask is a few percent. But if you’re considering diamond jewelry as a store of value, you’re probably losing 70% immediately, i.e. a piece of jewelry that a dealer would sell for $10,000 he’d might pay $3,000 to buy.
The handicap principle is a general one, applicable to humans and animals alike, and explains diamonds and other apparently wasteful resource uses. No one is entirely free of it even when they are aware of it.
However, non-rubes are often able to use other signals; ones that are both more representative of the underlying fitness and less easily gamed.
People are doing that. There is a company doing it maybe 20 miles from me, for example. Big Diamond is busy spinning out propaganda how “real” diamonds are better, though. The artificial ones still cost hundreds of dollars per carat, though. I’m hoping that the technology improves enough to reach cz prices.
Can you explain what this means? If someone buys a $2000 diamond from a jewelry store, it’s not going to cost $2000 in the resale market?
we also have a local place that makes gems that look like diamonds
Diamond in the rough? Charles & Colvard wants ‘forever’ to happen now | WRAL TechWire
My favorite jewelry, including rings, are ones hand made by an artist.
As a professor of marketing - I think the discussion is very fascinating. Everyone arbitrarily picks their point of outrage and pass self-righteous moral judgement on others that don’t. This reminds me of the previous threads on whether iPhone users are idiots for paying more versus a cheap Android.
I have bad news for everyone: there is little "inherent “value” in any luxury good or luxury brand. They are all “pure marketing cons”.
A Rolex tells time, so does a $20 Timex!!! A Mercedes gets you from point A to point B, so does a used chevy!! Diamonds are no different.
I do case studies in my class on the diamond industry and how it developed. Yes, it was it was artificially created, the same as many industries. They weren’t even original in how they did it: they directly copied the whole wedding / engagement gift concept straight from the luxury silverware and china industries.
Both of those industries struggled to find markets for their products. “How do we convince the masses to buy very expensive cutlery and tableware that they don’t need and will rarely use?” “Let’s tie it into special-occasion gifts!” Neither of those have any “inherent value” either, they’re pure “feel-good” and “show off your wealth” products.
That’s old news, time to update your files. Blood Diamond was good movie, but it’s now about as accurate as believing that the USA is still in Vietnam after seeing Platoon.
The vast majority of Diamond producers (and of the production) globally are part of the Kimberly Process:
https://www.kimberleyprocess.com
There are absolutely still issues and it’s not perfect, but it’s not the Blood Diamond days. If you buy from big producers, you’re very certain of ethical diamonds. In many cases they are doing massive amounts to support local communities (I used Debeers as a case example and I believe they now micro-engrave their diamonds, so you can trace them back to exactly where they came from. They’re also now majority owned by the Govt of Botswana, so they invest very heavily in the communities there.)
They’re worth it if the buyer thinks they’re worth it. That’s it. There is no other meaningful way to measure “worth” is monetary terms.
GMANCANADA nails it; saying “durrr, diamonds are a scam” is kind of ridiculous when everyone who says it turns around and pays a bizarrely arbitrary price for whatever their particular favourite toy is. People pay hundreds of dollars for a comic book, thousands for a baseball card, and who the hell knows what else. People pay money to go see movies, and you don’t even come away possessing anything tangible.
More diamond marketing BS. Using lasers and other techniques to reduce/remove inclusions in diamonds have been around for years, but nooooo, only a naturally flawless (there’s always some imperfections) diamond is worth the money. What??? If it looks the same, what’s the diff!!!
I give this website a tiny tap on the back for stating"
"Buying Tip:
If you cannot tolerate imperfections, even those you cannot see, choose a VVS2 or better diamond. About 10% of all diamonds sold fall into this category.
The most popular range is the VS1-VS2 diamond. These diamonds appear flawless to the naked eye, and are a fraction of the price of a truly flawless diamond. Almost half of all diamonds purchased fall into this range."
“If you cannot tolerate imperfections, even those you cannot see…” and “These diamonds appear flawless to the naked eye…”. Ohhhh, but someone trained or with a loupe will happily point how what you weren’t aware of seriously downgrading your “Beautiful diamond!” Jedi mind trick anyone???
See, I’d love to have this diamond.
You may as well ask if collectible art is a scam. I think Jackson Pollack pieces are garbage; others obviously disagree and pay millions for them. Does that mean he’s a master scammer?
By this logic, anything that costs more than its industrial value is a scam. The question of interest is why is the cost in excess of marginal value as high as it is. Is it organic (i.e. Jackson Pollack made something nobody ever made before, and he is now dead) or it is artificial (De Beers spends a lot of money persuading people that diamonds are rare and desirable, when they are only rare because DeBeers has a near monopoly on mining and hoards the mined diamonds to manipulate prices).
So, although well-cut high-quality diamonds are very pretty and should have some value, the prices and demand are greatly inflated, and consciously so. I think this meets the definition of a scam.
I appreciate your post, but the Wikipedia article says Botswana owns only 15% of DeBeers and Anglo American plc owns the rest. (Also, they are no longer a monopoly.)
DeBeers doesn’t microengrave their diamonds to track possible human rights violations. They do it so it’s possible to tell the difference between dirt diamonds, like they sell, and bespoke diamonds of equal or greater quality, because (so they claim) dirt diamonds are in some unspecifiable way superior to bespoke ones.
You seem to be conflating the term “bespoke” with “synthetic”. Bespoke just means custom-made with regard to the cut or setting.
DeBeers is also definitely getting into the synthetic diamond market, as lab-grown diamonds are becoming more popular.
The microengravings only serve as a way to determine whether the diamond is an authentic mined diamond. As you said, there’s nothing inherently superior about mined diamonds, but some buyers have a strong preference for mined.
Girl could buy a lotta Beanie Babies with a 2 karat diamond.
I’m just saying.
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