Tuesday, June 3, 2008
JCK Las Vegas Conference
Walking for miles through row after row of expensive metals and gems, everything begins to blend together. The three major colored stones- ruby, sapphire and emerald- begin to fog your sense of color and develop a sort of staple for the type of booth you pass by. Generic or designer? Domestic or foreign? On occasion, you will pass something that really catches your eye which makes the trip well worth it.
Pala International's Melo Pearls were very impressive. At $1690/carat (retail price) for a 26 carat pearl, they were a little out of my price range. Out of shear curiosity, I had to research the little carnivorous critter that concreted such a gem! Diamonds, sapphires, rubies and emeralds are everywhere, but gems like this you will be lucky to hold once in your lifetime. Josh Hall of Pala international explained how they are found by fisherman who catch the gastropods for consumption (yuk!!). The fishermen are lucky to find more then one in their entire careers!
I found the German jewelry pavilion and came across a great manufacturing idea. Thomas Giesen of CONTURA produces wedding rings that have been machined to look identical to your face's profile. Think about it; miss your girlfriend? Rub her cheeks. Husband cheat on you? Scrap his face for cash!!
For the tech geeks out there, I just have to mention my encounter with a laser welder. One of my mentors and instructors, Gary Smith of Smith Jewelers, PA, gave me my first lesson in the mighty "laser welder". Now, just to explain, a laser welder is a tool used to weld two piece of metal together. When I say metal i mean steel, copper, titanium, silver, gold, platinum, brass, bronze and any other metallic concoction. It can shoot holes through platinum bands to set small stones or it can re-tip platinum heads on white gold prongs. To say the least, it was very impressive.
For more info on the JCK Las Vegas show, visit the official website.
Thanks for reading,
Kennon
Sunday, May 4, 2008
Diamond Purchasing Advice
Purchasing Diamonds
Diamonds are one of the most subjective properties to purchase and may be one of the single most expensive purchases you will ever make. The following advice is intended to guide you through the purchasing process through the eyes of a professional. Hopefully, by reading this document, you will be able to choose a diamond that is worthy of the love you are symbolizing by its gift.
These “guidelines” are simply one opinion. Some people may want a huge stone, where they care less about clarity, color or cut. Take this advice subjectively and with your best personal judgment.
You have most likely heard of the four C’s. The following guidelines are a more discriminative six C’s:
1. Cost
Cost is as subjective as it gets. What one jeweler may consider a great price, another will consider ridiculous. This changes depending upon the region, buyer, seller, marketplace, quality of item, type of stone, market and price at which the seller purchased the item and much, much more. The best way of dealing with this problem is to get the item appraised by an Independent Accredited Appraiser. For more information on these professionals, consult either the American Society of Appraisers or the National Association of Jewelry Appraisers.
These professionals are trained and skilled in quality, value and marketplaces. It would take a fool to not consult a real estate appraiser before buying a house, the same way it would take a fool to purchase an expensive diamond without consulting a gems and jewelry appraiser.
If you are still opposed to paying someone for their opinion, try asking your jeweler this question: “I like this diamond/ring/jewelry, but I want to make sure that you are offering me a fair price and the diamond/ring/jewelry is of the quality you are telling me. I want to give you a down payment and take the item to an independent accredited appraiser. If this is a fair price and it is of the correct quality, I will buy the item. If you are not selling this to me for a fair price or it is not of the quality that you are telling me, then I want a refund for my deposit and you will pay the appraisal fee.” Get this agreement signed and in writing. If you end up purchasing the item, you will need the appraisal for insurance purposes anyway.
2. Clarity
Clarity characteristics of diamonds can be described as the presence, of what is commonly know as, “flaws”. A flaw in a crystal can include a break, a scratch, a cloud of tiny crystals or even an extremely rare ruby or emerald crystal locked inside its host diamond. Many clarity characteristics are undesirable opaque white or black inclusions. The value of the modern diamond is based upon a desire for a lack of any of these traits. The most widely used standardization has 11 grades, Flawless, to I3.
You shouldn’t be able to see anything in a stone that is SI2 or higher. However- you will want to avoid stones with “pepper” or graphite inclusions. A few SI2 grades may show visible inclusions without magnification. Never trust a grade of “SI3”. This term is occasionally used to describe a diamond that is equivalent in clarity to an “I1”. See the above GIA diamond grading chart for examples.
3. Color
You should first consider a color grade by which metal you wish to set a diamond in. A yellow metal will hide a yellow color in a diamond and a white metal will emphasize it. Stay above G or H with white metal mountings (silver, white gold and platinum) and above the “I” color grade with yellow metal settings (yellow gold). See the above GIA diamond grading chart for examples.
4. Cut
As long as your budget allows it, never settle for a grade below excellent. A flawless, colorless diamond with a “Good” cut can never be more then just “Good”. An included, yellow diamond with a “Excellent” cut grade will sparkle, shine and impress wherever it’s seen. When your partner shows off her new diamond, the response she’s looking for is “Oh my gosh! Look at that diamond sparkle!”
When you look at a stone that shines, it hides otherwise undesirable traits, such as inclusions and color. “Excellent” cut stones generally cost 15% to 20% more then “Good” cut stones. Don’t settle for less then “Excellent”. See the above GIA diamond grading chart for examples.
5. Carat Weight
This aspect directly relates to budget. If your partner wants a large stone, you may have to compromise on clarity or color. Purchase the largest size stone you can afford, after you achieve your required color and clarity grades. See the above GIA diamond grading chart for examples.
6. Confirmation
Last but certainly not least, this can be quite easy. Get a diamond grading report from the GIA or the AGS and have it verified by an independent gemologist. Just because a diamond comes with a report doesn’t mean that the report belongs to the diamond; have it verified. When you purchase a graded diamond, it will help you in several areas:
- Saves you money when getting it professionally appraised
- Provides a means of getting what you paid for
- Gives you a solid means of description if the diamond is ever lost, stolen or damaged
- Allows you to shop for better deals within certain grades and markets
Diamonds do not change or loose quality grades. If you own a diamond graded by the GIA, you could have it re-cut into a completely different shape, submit it from a foreign nation with different marked grades and the GIA would still recognize the same stone. Each diamond is as unique as a snowflake.
In another form of making sure your getting a “morally sufficient” stone, you may want to brush up on the Kimberley Process Certification Scheme.
Diamond Purchasing Conclusion
- Color grade of H or higher
- Clarity grade of SI2 or Higher
- Cut grade of "Excellent" (GIA standards) or "000" (AGS standards)
- Carat weight depends on budget or preference
Follow these simple guidelines and, rest assured, you’ll have a much easier time finding the perfect stone for the perfect person.
Gold Investment and Value
I am constantly stopped by my friends and clients with the same question: "What do you think gold is going to do?". Referring the value of gold, they are curious if investing in this commodity is a wise decision. We even had an article published in our local newspaper.
I regularly (quite possibly religiously) follow the prices of precious metals. In fact, I have a program installed on my desktop called "KCast" from Kitco (a leader in spot metal prices) which updates the current price of precious metals every 5 minutes. It can be entertaining to see it jump around as it has the last several months.
Rarely is jewelry an investment. I know this may sound contrary to your local salesperson's spiel, but it is true. Just like a car, jewelry looses value the moment it leaves the retail store. This is simply because, at retail, a consumer pays for everything that created that sale. Advertisements, inventory, fancy showcases and jewelry salespeople are just a few factors that affect the price of your jewelry.
Gold and precious metals have an independent worth. You cant melt a painting down and sell it, nor can you send a website off to a refinery. Precious metals, however, can be. Broadly speaking gold jewelry has about a 250% mark-up at the retail market level. This means that a $100 gold chain, bought by a jeweler at wholesale will be sold to the public for $250. This chain probably only contains $50 in gold value- what a "melt or scrap value" is. So, for your $250 investment, you generate less then $50.00- if your clever. A pawn shop will give you, generally speaking, only 60% to 80% of scrap value. Do yourself a favor and send your scrap gold to a refinery yourself. Or better yet, have a professional appraiser broker it for you so you don't get ripped off.
So what IS a good gold investment? Simply buying gold or precious metal at fair market value when prices are low and selling at fair market value when prices are high. Simple enough, right?
Lets take a look at what gold has done in the last eight years. In early 2000, gold was selling for about $285/ounce, equivalent to $350.36/ounce in 2008. Today, gold is selling around $950/ounce. This is nearly a 370% gain in investment.
There was another time period where precious metals skyrocketed. In 1980 our country faced a similar economic recession, and gold prices shot higher then they are today. At the peak of that jump, in January of 1980, gold was selling for the equivalent of $2185 today. Gold would have to more then double to meet this high value.
Gold seems to have a unique factor of staying valuable when other commodities are loosing value. If you truely want a "solid gold" investment, one should purchase when our economy is well off, and sell when the economy is doing poorly.
I contacted some professionals from around the US on this subject, here is what they said:
“Jewelers are notorious for saving filings, that is- tiny bits and pieces of gold left over from manufacturing and repair. A jeweler can accumulate several pounds of gold over a lifetime of service in the jewelry industry. This is how many traditional jewelers retire. Because of the huge spike in precious metals, jewelers across the nation have been recently granted the privilege of early retirement.”
David Wolf, GG, ASA
Master Gemologist Appraiser
New York, NY
“We have had, for the past five months, jewelers around the corner of our building waiting to have their gold refined. At this time last year, when jewelers bought their inventory, they priced it out to what melt value is today. That means every gold retailer basically sold their entire inventory in a brief six months.”
"Dave"
Gold Refiner
Philadelphia, PA
Thanks for reading! Feel free to shoot me any questions you may have regarding this topic or the jewelry industry.
-Kennon
Qualifications of a gems and jewelry appraiser
According to the United Standards of Professional Appraisal Practice (USPAP), an appraiser must be ALL of the following in order to produce a legitimate appraisal:
-Knowledgeable in the subject property
-Knowledgeable in Valuation in Personal Property
-Objectively Neutral
The first one is obvious- you must have your graduate gemologists diploma from the GIA or equivalent.
Knowledge in Valuation in Personal Property is offered by the American Society of Appraisers, the National Association of Jewelry Appraisers (and more) and results in acronyms after ones name such as ASA, AM, ISA, NAJA, etc.
The third requirement is the easiest to meet, but the most widely abused. It simply means that the appraiser cannot have any interest in the subject property being appraised. For example, someone who buys jewelry will have an objectively bias opinion of value, because if he or she values it lower, he or she can purchase it lower. Never get an appraisal from someone who sold you the piece, buys jewelry or charges a contingent of the appraised value.
Cecelia Gardner of the Jewelers Vigilance Committee at the 2004 AGTA Tucson Gem Show once stated:
"Out of 2000 companies, entities and individuals offering gems and jewelry appraisals in the U.S., 100 are considered legitimate."