Whether it’s here at Samuelson’s Diamonds, working on our startup, or our Facebook Fan page, the goal of my business, and our entire umbrella of companies, is finding ways to trade in diamonds. The other stuff is cool and I enjoy it, but I’m not gonna let it take me off my game. The more I can concentrate on what makes me real money and what I enjoy, the better off I’ll be.

But on the other hand, maybe this other stuff helps my diamond business. The other question is how much of this do we do ourselves and how much to we let outside professionals or a new employee do?

What do you think? Do you find yourself spending time on distractions that are not your business?

I’ve been taught by my father and grandfather this tradition of community, giving back, and standing behind my product and my word as a staple in our business.  And it posed the question that maybe young people aren’t learning this lesson. It seems that in this virtual world, everything is just a number, or in this case a piece of paper. And it’s very frustrating. Hopefully, that’s what social media is doing, giving a human touch to what used to be an information driven internet. So it’s not just a sale, but a business philosophy down here. A diamond is not what a laminated piece of paper says, but each has it’s own beauty and uniqueness.

It reminds me of this blog post I wrote back in November 2008 entitled, “How to Look at a Diamond”.

Francois Curiel, head of Christie’s international jewelry division says this:

Question: What makes a stone great?

Answer: “Its ideal proportions, its life and whether it talks to you or not. We had a group of young gemological students come to our New York viewing in October. We sat them behind the showcases, like real professionals, so that they could examine the diamonds. What struck me was that the first thing they did when they picked up a stone was to loupe it. I smiled because this is what I did when I started in the business and this is what all gemological schools teach you to do. When one gets a bit older, the loupe comes second and one first looks at the diamond in one’s hand. Do I like it? Even though the proportions might not be perfect by GIA [Gemological Institute of America] standards, do I want to own this stone? Ten people look at a gem, 11 opinions. So, what makes a stone great? Your eye and appreciation of it.”

We are real people.  We would love to meet you and talk to you about diamonds and explain what you should really be looking for!

Ron-

Speaking of driving safely, a car slammed into ours on our way back and we just got a room in the Comfort Inn in Bowie. Christmas is officially ruined.

So how do I reply to that?  It’s not my fault that he got in an accident, but I was honored that he would go through the trouble to come to Samuelson’s Diamonds.   After all, he made our day.  So I called the Comfort Inn in Bowie and paid for his room.  It’s the least I could do.  And here’s the response:

Ron,

Tara and I greatly appreciate your help. Like we said it was not necessary to take care of the room, but it is very nice of you. We are very excited for the ring to come in- I know it will be perfect. Expect our business for wedding bands- going through all this trouble, we still feel, is definitely worth it. Thank you for everything! Talk to you Monday.

So I think I did the right thing. And if you want to come to Baltimore and buy a diamond from us, we’ll put you up for a night too!

As far as the party went, I had every intention of not letting the blizzard bring us down. I even made this video.

Unfortunately, it snowed about 2 feet, so we had to postpone the party. Stay tuned though, if there’s one thing we know how to do down here, it’s have fun, and we WILL have another rockin’ party real soon!

From Diamonds.net:

Sotheby’s Jewels: Jewels of historical significance garnered strong prices at Sotheby’s Magnificent Jewels sale, held in Geneva on November 17. The Roxburghe Rubies suite (pictured) brought in $5,719,290 against a presale estimate of $618,000 to $1,097,000, with the necklace selling for $4,299,974 and the earrings going for $1,469,335. Overall, the Magnificent Jewels sale generated $36,682,714 (CHF 37,011,375), with 79 percent sold by lot.

Sotheby’s called its 2.52-carat, vivid green diamond the largest of its kind to appear at auction and it sold there for $3,078,914, which was slightly below the corresponding presales estimate. Another rare find was a fancy intense blue, brilliant-cut, 3.17-carat diamond ring, which Chatila acquired for $2,523,500, within its presale estimate. A fancy pink, cushion-shaped, 6.63-carat diamond fetched $1,413,833, which was also within the presale estimate range.

David Bennett, Sotheby’s chairman of jewelry for Europe and Middle East, said: “The Roxburghe Rubies, a magnificent suite, comprised of a ruby and diamond rivière necklace and earrings, the property of Mary, Duchess of Roxburghe, attracted extraordinary presale attention at exhibitions around the world, both for the quality of the rubies and the significant historical provenance, and sold for $5.7 million (CHF 5,821,000), five times the high estimate and a world-record price for a ruby suite.

“A remarkable array of colored diamonds was led by the price of $3.1 million (CHF 3,162,500) for a very impressive fancy vivid yellow diamond and included two new world-record prices per carat for green and intense blue diamonds,” Bennett added.

Chatila bought the fancy vivid yellow diamond, a 74.80-carat, cut-cornered, rectangular, modified brilliant-cut stone that was mounted in gold, for $3,134,417, which fell within the presale estimate range.

Christie’s Jewels: The Geneva Sale was 82 percent sold by lot and totaled $32,281,500 earlier today. Jean-Marc Lunel, head of the sale, said, “With $70 million of jewelry changing hands in two days at the Geneva auctions, the star lot of the week at Christie’s was an exceptional D flawless diamond of 62.30 carats purchased by Aleks Paul of Essex Global Trading for $8,051,000. This shows the clear resurgence of the jewelry market and we look forward to exciting sales in Hong Kong, New York and London in early December.”

Paul acquired the top three lots at the sale, starting with that 62.30-carat diamond, which was a type IIa pear, for $129,230 per carat. The second lot was comprised of a 3.30-carat, rectangular-cut, fancy intense blue and a 3.90-carat, E, VS2 diamond ring by Wolfers, which sold for $2,675,000. Paul offered the top bid for a fancy vivid, fancy intense and fancy blue diamond clasp: $2,675,000. The top three lots all sold well above their presale estimates.

Other sale highlights included a 24.92-carat, pear-shaped, light blue, type IIb, VVS2 diamond ring, mounted by Cartier,  that sold for $1,555,000. A 13.91-carat, oval-shaped D, VVS2 diamond ring fetched $1,203,000.

Selling slightly above its presale estimate was a 7.03-carat, oval-shaped Burmese ruby and diamond ring designed by Graff, which sold for $1,131,000. The final lot that sold for more than $1 million was a 65.20-carat, cushion-shaped, fancy intense yellow, VS2 diamond pendant that went for $1,035,000, which was within its presale estimate range.

Christie’s also noted that a 19.13-carat, briolette-cut, fancy grayish-yellowish green chameleon diamond-pendant necklace set a record price for a chameleon at auction: $987,000.

The rare colored diamonds and BIG stones brought the big bucks.  We love large and colored diamonds down here, so please let me know if you would like to invest in one of these diamonds.  They are what will make you money over the long term.

Tiffany is also feeling the pressure. Its inventory has swelled to $1.54 billion this year, up from $1 billion in early 2005. For the first time in recent memory, Tiffany says, it has lowered its prices for diamonds. The engagement rings it sells in the U.S. are priced 10% lower than last year. In all, the company expects a “high teens” decline in sales this year at U.S. stores open at least a year.

Tiffany acknowledges its lack of mining expertise. Although it reaped a large financial gain from its 2004 sale of a minority stake in the 40%-owner of a Canadian mine, it recently disclosed that it wrote off a $12.4 million investment in a small mining project in Sierra Leone. It also has written off loans of about $44 million to a former supplier whose mine has ceased operations. “I think we want to let the miners do the mining,” said Chief Financial Officer James Fernandez.

Here’s an interesting video on diamond mining:

It’s a conflict to their brand but let me let you in on a little secret…I found the biggest diamond mine in the world and it’s people just like you who want to sell their diamonds!!

Here’s what some of the experts are saying from this Wall Street Journal Article:

Bud Conrad, chief economist at Casey Research and a leading gold bug, says it’s worth far more. Based on long-term analyses of macroeconomic trends such as the money supply, he says, “a lot of ratios… get you into the $4,000 to $5,000 level without any problem.”

Of course the WSJ has no idea just like the rest of us:

And although gold looks bullish in dollars, that specifically reflects the greenback’s weakness gold remains well below last winter’s peaks when priced in pounds, euros, yen, or Swiss francs.

Despite gold’s rise, the market is not, yet signaling any great concern about inflation. On the contrary, when you compare the yields on regular 10-year Treasury bonds and the yields on inflation-protected bonds, the market right now thinks inflation is likely to be about 2% a year for the next decade. That’s well below the levels seen before the 2008 crisis.

In short: Stay tuned. Gold may boom from here, or it may not. At this juncture dry powder may prove a better investment than yellow metal.

What do I think?  I don’t think $4-5000 per ounce is realistic any time soon, but $1200 – $1500 is possible in the next year.  I definitely do not think that gold will go back to $500-600 per ounce as it was not too long ago.

I will say that DIAMONDS are a better investment and will hold strong, especially when this economy comes back.  I also think that platinum will go up to $2000 per ounce in the next year (where it was a year ago) once people start buying cars again.

Who are you gonna listen to – The Wall Street Journal or Ramble On Ron?

“I am a fan. I will say pre FB, who would have thought I would be a fan of a jewelry store I have not even been to. Or even just a jewelry store for that matter..Yet I know the history of the store, and watched the footage. Prince on the big screen etc..Even Ron’s Strat…
PS..Ron, go for a Gretch Nashville next…Heaven on Earth!”

There you go.  It’s not about shoving product down people’s throats.  It’s not about selling yourself all the time.  It’s about being yourself and showing everyone your brand and what YOU are all about.  Whether it’s next week or in 10 years, if this guy is ever in the market for a diamond, I think I’ll be on his list.  And even better, maybe we’ll have a jam session!

Recession brings glut of diamonds, but few buyers

Baltimore–Last year, Ron Samuelson, chief executive of Samuelson’s Diamonds in Baltimore, bought an 8.5-carat brownish-yellow round diamond mounted in a men’s nugget ring from a customer who was seduced by the “sell your jewelry” offer on the store’s Web site.

“It was a big, ugly stone,” Samuelson recalls. “When we showed it to our cutter, he said, ‘Yeah, I could make this into a fancy yellow.’”

The resulting diamond, a 6.86-carat fancy-yellow radiant, is now part of the store’s inventory, and Samuelson is confident that when he eventually sells the stone, it will net him a tidy profit.

“I’ve almost eliminated my need for diamond dealers,” Samuelson says. “For every one person who wants to buy a diamond, 20 want to sell.”

As a comment on supply and demand in the high-end diamond trade, the Samuelson’s transaction is fitting though hardly anomalous. On Manhattan’s 47th Street, it happens countless times a day.

From the mines to the retail trenches, the perpetual scarcity that defined the business and fueled its tremendous growth over the past five years has, since last fall, morphed into an unfamiliar abundance: so many goods, so few willing buyers.

Take, for example, the market for large, quality diamonds–specifically, the impressive but ultimately replaceable stones in sizes of, say, 10 or 12 carats (not the 40-carat, D-flawlesses or rare vivid-blue diamonds that appear only at auction). A year ago, such stones were impossible to find and came with sticker prices that many described as speculative. Today, they languish on the ultimate buyer’s market. Prices, while said to be firming, are still well below their mid 2008 peak. The auctions are selling them as “real values.”

It’s a sign of these crazy times that not even the Russians are interested.

“We’re not in a crisis because in a crisis, everything goes to hell and comes back,” diamond industry analyst Martin Rapaport, chairman of the Rapaport Group, said during a presentation at BaselWorld. “This is not that, because nothing will be the same. Forces beyond our control are changing the diamond and jewelry industry.”

Citing culprits that contributed to last year’s financial ruin, which resulted in “30 trillion dollars going to hell in a bucket over the last six months,” Rapaport ticked off plummeting real estate prices, soaring unemployment rates and Bernie Madoff.

“Does that affect whether people want to buy diamonds? Duh,” Rapaport said.

The drastic change in consumer sentiment has thrown the diamond industry, like all luxury businesses, into an unprecedented predicament. Crammed full of goods, the pipeline has been in virtual gridlock since last fall, when luxury consumers decided, seemingly en masse, to stop spending. Retailers slashed prices on their holiday merchandise but to no avail. Jewelry continued to literally gather dust in showcases.

“From retailers to producers, it’s hard to think of a more difficult five or six months,” De Beers Botswana Chairman Stephen Lussier says. “We’ve had other crises that impacted one segment of the industry but this one has been universally challenging.”

The rich get poorer

By now, the events that led to such an equal opportunity downturn are permanently imprinted upon the collective consciousness: The United States officially slipped into recession in December 2007, after years of deregulation and chronic risk-taking by the masters of the universe who had created, in effect, a global Ponzi scheme built upon illusory profits and questionable investments.

Throughout the spring and early summer of 2008, however, alarms bells only seemed to ring in the mass market. The trade’s highest echelons claimed immunity to the deteriorating economy, even as signs that things were seriously amiss (Iceland, anyone?) grew difficult to ignore.

It took the Lehman Brothers bankruptcy on Sept. 15 for the biggest spenders to finally grasp that even their rarefied sector of the marketplace could not provide shelter from the storm. Unlike past recessions, which tended to leave the super-wealthy unscathed, this one actually seemed to have the fat cats in its crosshairs.

Sales of luxury yachts, private jets, complicated Swiss watches and, of course, diamond jewels immediately registered the effects of the new consumer mood. A 60 percent decline in fourth quarter U.S. retail sales at Harry Winston (among others) was further proof that a paradigm shift was in progress.

“Luxury is the easiest thing for anyone to cut back on, and jewelry is the ultimate luxury item,” says Pam Danziger, president of Unity Marketing, a consumer insights firm that specializes in the luxury consumer mindset. “People are making a huge adjustment fueled by the media, their own experiences. There’s a bit of leftover guilt from all that spending. These trends were already in the market, making the affluent more careful about their spending. Recession was the tipping point.”

With retail sales down anywhere from 5 to 80 percent after the holidays, wholesale buying largely came to a standstill. It was a simple solution to a crisis of liquidity and retailers embraced it wholeheartedly.

“We’ve got a lot of inventory and haven’t had to fill in as we did last year,” says Brad Marks, vice president of I W Marks Jewelers in Houston. “Vendors have been very good about understanding that things are not moving.”

The one exception, of course, is bridal. Marks, like almost every other jeweler who carries a selection of bridal jewelry, hasn’t had to cut back on that portion of his inventory.

Based on how little actual trade has gone on over the past half-year, Las Vegas market week will be a crucible for the industry. Although many retailers interviewed by National Jeweler at press time said they plan to attend the shows, there is little indication that they will revert to their old spending habits. In fact, if anecdotal evidence is to be believed, sales to retailers won’t pick back up until fall, when it will be easier to estimate how much new inventory the holidays will require.

The companies most vulnerable to the new business-as-usual are jewelry manufacturers, designers and diamond dealers who rely on sales to retailers. Case in point: Doris Panos, the couture designer who filed for Chapter 11 bankruptcy protection in April. Not only have customers stopped buying, but banks have stopped lending, leaving them, as far as cash and credit are concerned, on dangerously thin ice.

So what does this say?  It’s a great time to buy not just for me, but for consumers.  It’s the people that take advantage of real values in this market that will come out smelling like roses in the end.  There are sooo many deals out there and I can’t get enough of them, so if you like diamonds now’s the time!