Can a Diamond Be Too Big?

When it comes to diamonds, most people probably think that bigger is better.  After all, tiny diamonds are quite common and diamonds over 1 carat in size are comparatively rare.

Once you get beyond 5 carats or so, we’re talking about unusually rare diamonds and the price per carat goes up dramatically after that.

lesedi la ronaSo as a rule, it would make sense to most people that a really large diamond would be extremely valuable, and that someone would be willing to pay a lot of money for it.

That’s what the Lucara Diamond Corporation thought when they found the diamond they call the “Lesedi La Rona,” or “Our Light,” in the native language of Botswana.

This diamond weighs in at 1109 carats.  For an idea of how large that is, the stone is roughly the size of a tennis ball.  It’s also the second largest diamond ever found.

That would seem to be a big deal, and you’d think that people would be lining up to buy it.  They were, actually, but the bidding topped out at $61 million, which was short of the $70 million reserve price that the company was hoping to receive.

As a result, the company is trying to decided what to do next.  One of the most common suggestions is that the diamond, which is in its rough, uncut natural state, be cut and polished to a smaller size.

Lesedia la rona
This diamond is the size of a tennis ball

More buyers might be interested in a such a sizable stone if it were in a condition more suitable to jewelry, but the company is a bit hesitant to make that move.  After all, as it is, the stone is the second largest in the world.

If it were cut to a smaller size, it might be seen by potential buyers as being somewhat less remarkable.

There are other issues concerning cutting the stone.  Cutting extra-large diamonds is an imprecise science, despite improvements in technology over the past few decades.  It will take a long time and a lot of expense to cut the stone, and there’s no guarantee that the result will be aesthetically pleasing, nor is there a guarantee that the stone will not have some significant flaws in it.

Others are suggesting that Lucara simply hang on to the stone for a few years and sell it at a later date.  That might work, but the problem with that is that technology for finding large diamonds has improved considerably, and the company could be taking the risk that a larger, and more desirable stone might be mined in the next few years.

Were that to happen, the Lesedi La Rona would suddenly become less remarkable and in turn, less marketable.

An 1100 carat stone is itself too large to be useful as jewelry, but buyers might want it simply as an artifact.  Some jewelry company could also buy it, cut it into a number of smaller stones, and sell them off as part of a piece of history.

Regardless, at the moment, the stone is effectively the world’s most valuable paperweight, which is an odd situation for the owner of the world’s second largest diamond.

It’s Time for Diamonds

Diamonds are lovely.  They sparkle, they shine like nothing else, and they attract attention.  If you like something with a little sparkle, a diamond is a great way to get that.

Diamonds are expensive, however, and if you are going to spend a lot of money on diamonds, you want to make sure that they are seen.  That way, other people can enjoy them, too.

Cartier Ladies Pasha diamond watch
Cartier Ladies Pasha diamond watch

Oddly enough, some ways of wearing diamonds don’t allow you to show them off.  Earrings, for example, can be hidden behind your hair.  Some types of necklaces might be hidden by your hair or your collar, depending on what you’re wearing.

On the other hand, a watch with diamonds is something that most people will find hard to miss.  First of all, most diamond watches are made from precious metals, such as platinum or gold.  Second, most watches with diamonds don’t just have one or two diamonds, but instead may have dozens of them.

Granted, you won’t see exceptionally large diamonds on a wristwatch.   But a watch band or a bezel has a lot of real estate for a maker to slip a little bit of sparkle in there.  You can put anywhere from 20-40 diamonds around a bezel.  You can put a dozen more on the face of the watch as hour markers.

patek philippe grand complications
Patek Philippe Grand Complications

We’ve even seen watch bracelets with hundreds of diamonds on them.  Granted, they’re mostly very small diamonds, as a watch isn’t really suited to large stones.  On the other hand, if you have hundreds of diamonds, even tiny ones, on a watch bracelet, people will notice.

That’s a lot of sparkle, and if you put a watch bracelet with hundreds of diamonds under a good light, it will be hard to miss.

Obviously, if you’re buying a watch with diamonds, you will necessarily be spending a lot of money.  Prices can range widely, depending on the brand, the other materials in the watch and the size and quantity of diamonds involved.

Chopard Imperiale rose gold
Chopard Imperiale rose gold

In most cases, however, you will be talking about prices in excess of $10,000 and sometimes in excess of $100,000.

On the plus side, you will likely be investing in a timepiece from a company that is already renowned for making quality watches.  The diamonds are there for a little extra pizazz.

A number of luxury watch brands make watches with diamonds on them.  Some, like Rolex, Patek Philippe and Audemars Piguet, are watch specialists who offer a few models with diamonds in their lineup.

Others, such as Chanel watches, are primarily fashion brands that also offer watches as part of their overall product offering.  Chanel is probably best known for their Number Five perfume, but they also make a number of other things, including clothing, jewelry, and some very fine wristwatches that can often be found with a lot of diamonds on them.

You should take extra care if you buy a watch with diamonds, as the stones can occasionally work loose with time.  This isn’t the fault of the watchmaker, but is just part of the natural process of wear.  The diamonds in the watch are harder than the metal that is holding them in place, and that metal will wear over time.

It’s always a good idea to have your diamond jewelry, including watches, checked by a jeweler on a regular basis to ensure that your diamonds remain secure.

The Mystery of Black Diamonds

It’s well known that the majority of diamonds are known as “white” diamonds, though they’re actually clear.

Diamonds do come in other colors, however, and demand for those tends to be high, as do the prices you will pay for them when you buy them in a store.  There’s a reason that colored diamonds are expensive – they are rare.

black diamond ringWhile diamonds come in pink, blue, yellow, brown and green, those colors comprise a very small portion of the millions of carats of diamonds that are mined each year.

There’s another color of diamond that turns up naturally, and they have only recently started to become popular – black diamonds.

Black diamonds are naturally occurring stones, and they are made from the same material as any other diamond – carbon.  In this case, some graphite has gotten into the mix, and the resulting stone, known as “carbonado” has some interesting qualities to it.

It’s more difficult to cut and polish than a white diamond, which can make them difficult for jewelers to work with.  They’re also rare to the point where demand exceeds supply, and that has led various companies to use heat and radiation treatments to cause white diamonds to become black ones.

They’re not technically black, as they turn a very dark shade of green, but these man-enhanced diamonds to appear to be black to the naked eye.

Naturally occurring black diamonds are known as Natural Fancy, and they are both exceptionally rare and exceptionally expensive.  You likely won’t find them at just any jewelry store.

The artificial ones, on the other hand, are relatively common.  They are also a lot more affordable.  People like them because they can offer good contrast with white diamonds, and the two colors often look stunning when paired together in a necklace, a ring, or a pair of earrings.

black diamondsThere is one significant aspect of naturally occurring black diamonds that should be noted – they do not reflect light as a white diamond does.  That can, under certain lighting conditions, give them somewhat of a dull appearance, rather than the flashy, sparkly appearance that people expect to see in a diamond.

You should take care when buying black diamonds, as the difference in price between the artificially produced ones and the naturally occurring ones can be dramatic.  If you insist on getting Natural Fancy black diamonds, look for examples that have been GIA certified.  GIA will not certify enhanced diamonds, so if they’re certified, they are the real thing.

Diamonds are lovely things, and that’s true of all of the colors in which they come.  While most people still prefer white diamonds, colored ones do have their appeal.   A black diamond is rather extreme as colored diamonds go, but it’s a great way to make a statement.

If you’re on a budget or aren’t really interested in buying investment-grade diamonds, then the artificially colored black diamonds will work fine for most buyers.  They’re still quite attractive, and they are far more affordable than the natural ones, putting them within the budgets of far more people.

At a glance, they’re still very pretty and they will still be great conversation starters.  Most people won’t know (or care) about the difference.

The Fog of Conflict-Free Diamonds

Thanks to a 2005 movie called Blood Diamond, people around the world are now aware that there is more to those lovely stones than just carbon.  Diamonds have value, and everything with value has the potential for being compromised via greed.

The problem with diamonds specifically is that many of the world’s diamonds come from war-torn countries in Africa, and when you buy diamonds from such places, you may inadvertently be helping to fund some political causes that are a bit unsavory.

You also might be funding child labor, or helping to keep a tyrant or despot in power.  Obviously, most people have no interest in funding such things, and most diamond buyers just want a stone that looks nice in their ring, necklace or bracelet.

Still, a booming business has popped up in the past few years – companies offering to sell “conflict-free” diamonds.  These are said to be diamonds that are sourced from places that do not have the war, labor issues, or political entanglements that most people would rather avoid.

These companies claim that the diamonds that they sell are only sourced from “safe” places, and that you can rest easy by buying from them.

Of course, if you buy from them, you will likely pay a premium price for your diamond.  After all, it can cost a lot of money to ensure that the diamonds come from a safe place.

There have been systems in place since 2003 for making sure that people know where their diamonds are coming from, such as the Kimberly Process.  The problem with that, and with the business model of selling conflict-free diamonds is that everyone knows that conflict-free diamonds command a premium.

Everyone knows that conflict-free diamonds are in demand.  Everyone knows that people will not willingly buy a diamond that comes from a place where the money from the purchase may be used to fund people who aren’t very nice.

What that means for diamond buyers is that every person in the supply chain has an incentive to make sure that there isn’t any trail that links their diamonds to conflict.  That doesn’t mean they have an incentive to handle or sell only conflict-free diamonds; it just means that they have a tremendous incentive to make sure that if they do handle diamonds that are sourced from a questionable place that you don’t find out about it.

There are places where you can buy diamonds that are absolutely conflict-free, such as those that are sourced from Canada.  Everything else is somewhat foggy, unfortunately, as it’s easy to create a new paper trail for what is essentially a rock.  Most naturally occurring diamonds don’t have any marks on them, as do man-made ones.  You’re pretty much at the mercy of the seller as to the source.

What does this mean for the buyer?  If you’re concerned, you should buy only from sources that are unquestionably legitimate.  You do need to be aware that even companies that are sincere in their quest to sell only conflict-free diamonds may not be able to guarantee it.

Diamonds are lovely.  It’s a shame they’re often tied to war, but it is what it is.

$13 Diamond Ring Worth Hundreds of Thousands

We all dream of finding something that’s worth a fortune while scouring through flea markets, garage sales and second hand stores, but most of the time, that’s all such thoughts are – dreams.

Sometimes, however, dreams come true, and that is certainly the case for an anonymous couple from Great Britain.  Sometime in the 1980s, they purchased a ring for £10 (about $13 today) at a “car boot sale” in England.

This is a local event where a number of individuals sell things out of the trunks of their car in a parking lot.  A man bought the ring, which both he and the seller assumed was a piece of costume jewelry, for that price, and they both thought that the large “diamond” in the center was a fake or a reproduction.

The man’s wife, who liked the ring, wore it daily for decades.  Recently, they had it inspected by a jeweler, who told them that the diamond appeared to be real and that it might be worth “quite a bit of money.”

That is indeed the case.  The diamond, cut in a cushion shape, is a 26.27 carat white diamond, thought to have been originally cut in the 19th century.  No one really knows its origin, as the owner has long forgotten anything about the person from whom he acquired it.

The diamond is going to be sold at auction by Sotheby’s in London on June 7.  “This is an extremely rare find,” said Jessica Wyndham, head of the auction house’s jewelery department. “We’re used to people coming in with pieces from their personal collections but this was exceptional.”

car boot diamondIt’s easy to understand how the ring avoided attracting attention for many years.  It was set in a silver ring, and the cushion shaped stone was cut in such a way as to optimally reflect the sort of light sources that were common 150 years ago, but not so much the sorts of light sources that we have today.

“With an old style of cutting, an antique cushion shape, the light doesn’t reflect back as much as it would from a modern stone cutting. Cutters worked more with the natural shape of the crystal, to conserve as much weight of the crystal rather than make it as brilliant as possible.”

While it is hard to put an exact figure on the value for the stone, it is expected to bring somewhere between $325,000 and $450,000 when it is sold at auction.

That’s a pretty good return on a $13 investment, even taking into consideration the amount of time that has passed.

UPDATE: The auction has been completed, and the final sale price was roughly twice the amount the diamond had been expected to yield.  The final selling price was £656,750 ($847,667.)

Ordinarily, diamonds such as this one are purchased by private collectors who wish to remain anonymous.  In this case, the buyer was a company within the industry, though Sotheby’s did not disclose the name of the company that purchased it.

The old “cushion” cut is different from the way diamonds are cut today and as a result, the stone does not show the brilliance that one would see in a modern stone.  There’s less shine and sparkle to it, but that’s indicative of how jewelers cut diamonds in the nineteenth century.

Since diamond mining was still in its infancy at that time, diamonds were relatively rare.  While the origin of the stone and its original owner have been lost to history, jewelers suspect that the original owner was someone who was either a member of royalty or was extremely wealthy.

While the future of the diamond is unknown, it is anticipated that the company that now owns it will have it recut into a more modern shape.  While this will reduce the size of the cut diamond, it will dramatically enhance its brilliance and will likely increase its value dramatically.   A spokesman for Sotheby’s said that they thought that the recut stone could potentially sell for “a multiple of today’s price.”

Not bad for a $13 purchase.  The sales price included a 20% buyer’s premium.

 

 

Diamond Handbag Sells for $377,000

How much are you willing to pay for a handbag or a purse?  $50?  $100?  How about $377,000?

That was the price for a Hermes handbag sold recently at an auction in Hong Kong.  Of course, Hermes handbags sell for thousands, and sometimes tens of thousands, on their own.

This one was different, however, as it was covered in diamonds and boasted 18 karat gold hardware.  The bidding was said to be “intense” and went on for some 15 minutes before the bag found a happy buyer.

Hermes bags aren’t for everyone; they’re mostly sought out by the people that even rich people regard as wealthy.  Not all of them are adorned with gold and diamonds, either.  The company only makes about two bags a year like this, and the waiting list, even for a handbag with a six figure price tag, is some six years long right now.

hermes diamond handbagThe bag sold in Hong Kong was created in the mid-1980s for singer and actress Jane Birkin.

While such handbags certainly attract attention when they’re sold, we can’t help but wonder – who buys them?  What do you do with them?  It’s unlikely that the buyer is going to carry the bag around in public, as doing so would represent a significant threat to their investment.

It’s also likely that the buyer, who was unidentified, is male, only because items like this are purchased for investments, rather than as functional fashion accessories, and people who tend to invest in such things are statistically more likely to be men than women.

This isn’t the first such Hermes bag to reach the Stratosphere in price.  The Christies auction house sold a similar bag for $300,000 last year.  That bag was said to have fewer diamonds and less gold, though once you’re in that price range, the Hermes name alone is likely enough to keep the price up and the number of diamonds and the amount of gold on the handbag likely has little to do with the final price once the auctioneer declares the item over.

We think that diamonds, while lovely, are best suited to being placed in an environment where they can be enjoyed on a regular basis.  Generally speaking that means putting them in jewelry, and using them in modest amounts that keep the price affordable.

More importantly, you don’t want to have so many diamonds in a single piece of jewelry that the owner is too intimidated to wear it.  Diamonds are meant to be worn and are meant to be seen.

What’s the point of owning diamonds if you’re only going to store them in a vault somewhere and never even look at them?

That, in our mind, is a waste of a beautiful thing.

 

More Diamond Fun Facts

Most people think they know a bit about diamonds, and here’s what the average person will likely tell you that they know:

  • Diamonds are gemstones, used in jewelry.
  • Diamonds are the hardest known substance.

One of those statements is true, but the other one is not.  Diamonds are the hardest known substance, and the only thing that can scratch or harm a diamond in any way is another diamond.

That part is true.  The part that is not true is that most diamonds are used in jewelry.  In fact, diamonds of sufficient quality to be used in jewelry are actually somewhat scarce.

Not all diamonds are gemstones.

There’s a mine in Botswana that mines some 15 million carats of diamonds every year.  But most of them end up being used in industry, and only a small percentage of them find their way to a jewelry store.

Most diamonds are too small, or have too many defects, or are unattractive colors, such as brownish yellow.  To be used in a piece of jewelry, a diamond has to be of a certain size, have a nice color to it, and have relatively few defects, or inclusions, that might affect its ability to reflect light.

What happens to all of the diamonds that don’t make the cut?  Some are used in drill bits, others are used in phonograph needles, and many of them are used to cut or polish other diamonds, since they’re the only thing that will work.

Not all diamonds are the same shape.

There are about eight different shapes of diamonds that are commonly seen, though the Round Brilliant shape is the one that most people associate with the gemstone.   Today, they only make up about half of all diamonds sold in jewelry, with other cuts sharing the other half of sales.

Not all diamonds are white or clear.

Most diamonds that you see for sale are clear or “white,” as they’re known.  That’s not the only color, however.  Diamonds also come in yellow, brown, blue, pink, and red.  Even we were surprised at that, as red diamonds are apparently exceedingly rare, and many people who have dealt in diamonds professionally for their entire careers never see one.

Pink and blue ones are also quite rare, and quite desirable, so if you want one of those, be prepared to spend a lot more money on them.

How are the shapes chosen?

The shapes of diamonds are determined by a complex process that diamond cutters have learned from years of experience.  Some diamonds are best cut into multiple stones, while others are best left as a single stone.  The shape of the raw diamond helps determine the shape of the finished product, as do the defects that may be present in the stone.

Cutting away less desirable parts of the stone may leave the remainder suitable for gemstone use, but doing so may force the cutter to use one particular shape, rather than another.

Diamonds are rare.

Diamonds aren’t particularly rare; hundreds of millions of carats of diamonds are mined annually.   On the other hand, highly attractive gemstone quality diamonds are rare, and that’s why they’re expensive.

 

 

Diamonds to Be Used in Electronics?

While diamonds are best thought of as luxury items to be worn as jewelry, most people are at least vaguely aware that diamonds also have use in industry.

diamond transistorsThe bulk of the diamonds found are not suitable for use in jewelry, as they’re either too small for such use or they have defects of some kind.  Most are just too small, but small diamonds have uses.  For example, most phonographs use a diamond-tipped needle to play record albums.

Diamonds are also used in industrial drill bits, as they are exceptionally hard and diamond-tipped bits are quite good at helping to drill through hard rock.

These sorts of uses have been around for a long time, but now, scientists are experimenting with using diamonds in transistors.

Most transistors are made from silicon, and silicon is a very plentiful substance, making it cheap to use.  That’s good, since the processor chip in your computer might have millions of transistors within it.

The problem with silicon transistors is that there are certain environments where silicon does not perform well – tremendously hot environments or environments where heavy radiation is present.

These are areas where silicon is weak, but they’re also areas where industry could use devices that have transistors in them.  Because of that, scientists in Japan are experimenting with using man-made diamonds in transistors.

Diamonds are very hard, of course, and they are also resistant to both heat and radiation.  Early experiments have been promising, though building integrated circuits from diamonds is still likely a number of years away.

Scientists must first find ways to bond other materials to the man-made diamonds and then find ways to bring the costs down through economies of scale.  These things can take years, or even decades to do.  The first transistor radios, made in the 1950s, were very expensive and unaffordable for the average consumer.  It took about fifteen years before the price came down, and eventually, transistors became so cheap that they’re found in nearly all electronic devices today.

 

 

Fun Facts About Diamonds

Aside from the fact that they’re shiny and pretty, most people don’t know a lot about diamonds.  OK, maybe people also know that they’re expensive and that they’re often used in engagement rings.

But diamonds have an interesting history, and there are a few other things about them that you might want to know:

The word “diamond” comes from the Greek word “adamas,” meaning indestructible.  That’s a good choice, as diamonds are the hardest known substance.

How hard?  The only way to scratch a diamond is to use another diamond to do it.

Unlike other gemstones, such as rubies, emeralds and sapphires, diamonds consist of one element only – carbon.

Diamonds are billions of years old, and were formed hundreds of miles beneath the Earth’s surface.  Volcanic and seismic activity over time has forced them to the surface.

The ancient Romans thought that diamonds were tears of the gods.

Diamonds were once thought to have medicinal properties, and some cultures thought that diamonds gave their bearers unusual strength.

Diamonds are only found in a few places on Earth, though the areas of primary importance have changed over time.  In the fifteenth century, India was the primary source.  Today, while diamonds are found in many parts of the globe, most of the mining takes place in South Africa.

There is a park in Arkansas where you can search for diamonds and keep any that you find.

The largest diamond ever found is the Culinan diamond, and it weight in at 3106 carats.  That’s about 20 ounces.  The diamond was found in South Africa, and given to King Edward of Britain.  It remains there as part of the country’s crown jewels.

Diamonds can now be created in a laboratory, and their quality is virtually identical to those of natural diamonds.   They’re also a bit more affordable.

Scientists discovered a planet in 2004 that they think might have 1/3 of its mass in diamond.  That would be impressive, were it not so far away that we’d never be able to get there.

The use of diamonds in engagement rings is for the most part a relatively new phenomenon, largely spurred by the diamond industry itself.

Synthetic or Real Diamonds? Does It Matter?

Diamonds are made from carbon, and they take millions of years to form, and you pull them out of the ground.  If you’re lucky, you can occasionally just find one lying around, but most of the time, they have to be mined.

Again, luck is involved, and you never know if you’re going to find small, industrial-grade diamonds or bigger, jewelry grade diamonds.  Because the latter are relatively rare, especially in colors other than white, they tend to sell for extraordinary amounts of money.

man made diamondA lot of people may not be aware, however, that man-made diamonds are also available.  Attempts to manufacture diamonds go back more than a century, but it’s only in the last 20 years that the industry has gotten good enough at manufacturing diamonds that they can produce high-quality gemstones that are virtually indistinguishable from naturally occurring gemstones.

Early attempts at manufacture produced stones that had use in industry, but in order to work for jewelry, diamonds have to have a lot of sparkle, acceptable shape, and few flaws.  It’s taken a long time to get there, but it’s now possible to produce synthetic, or man-made diamonds that rival the natural ones in terms of appearance.

In one way, they actually exceed the naturally occurring variety – price.   Man-made diamonds usually sell for 30%-40% less then the natural variety.  Part of this is due to the fact that man-made gemstones can be produced with both quality and quantity, making them more available.

Another reason is that buyers, at least at this point, still prefer to purchase natural gemstones.  To the naked eye, the two appear to be very similar, and only a jeweler can tell them apart.  There is one giveaway, provided that you have a microscope – man-made diamonds have a serial number engraved upon them, while naturally occurring ones don’t.

Naturally occurring stones do have a few advantages, though the most significant one is not one that’s likely to affect the average buyer – size.   At the moment, there’s a limit to how large of a gemstone that the industry can produce, and it’s in the three carat range.  That’s a pretty sizable stone, however, and even at the discount that you’d get for buying a man-made stone, it’s one that would likely be out of the price range of all but the most well-funded of buyers.

sierra leone diamond
The 709 carat diamond found in Sierra Leone

Larger stones do occur naturally, though they’re not gem-quality diamonds when found in the wild.  These stones always have to be cut to shape and to a smaller size.  Still, the largest stone ever found was more than 3000 carats, and a diamond of more than 700 carats was recently found in Sierra Leone.

We don’t expect to see diamonds of that size produced in a laboratory anytime soon.  For now, small diamonds of less than 3 carats are likely to be more than large enough for the average buyer, and lots of buyers will be all too happy to pay a somewhat lower price for a man-made diamond that looks just like a natural one, except for the price tag.