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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: austrieconomist who wrote (17281)	8/20/2003 9:17:38 AM
From: austrieconomist	Read Replies (1) \| Respond to of 39344

Negative report on diamond plays - FWIW #266 - Sell Your Diamonds Now The Investment U E-Letter Monday, August 18, 2003 * * * * * * * Sell Your Diamonds Now By Dr. Steve Sjuggerud President, Investment U Flawless diamonds for $5 a carat... At least two tiny companies are producing real diamonds in a lab, for pennies on the dollar. What they're doing amounts to the beginning of the end of DeBeers' monopoly on diamonds. And it's likely the end of exorbitant prices on diamonds - forever. Beat the rush before the word gets out... If that diamond you have in the jewelry box or the safe deposit box doesn't mean something to you, dump it now, while you can still get the maximum value out of it... Cheap - but very real - diamonds are on the way... DeBeers Confronts the General "This is a rare stone," dealer Aron Weingarten said. "Yellow diamonds [like this] are hard to find. It is probably worth $10-, maybe $15,000." Weingarten knows diamonds. His shop is in Antwerp, Belgium, where nearly 80% of the world's rough and polished diamonds pass through on their way to being bought or sold around the world. Weingarten was then presented with two more identical large yellow diamonds, and told that all these stones were made by a machine in Florida - owned by a company called Gemesis - for less than a hundred dollars. Weingarten's jaw dropped... "These stones will bankrupt the industry," he said. The machine in Florida is a story in itself... Carter Clarke, a 75-year-old retired Army general, bought this machine in Russia for $57,000 eight years ago. ("Hell, what could be more fun than trying to make diamonds?" he thought.) The General brought the diamond maker back home, only to find that (surprise!) the Russian machine didn't reliably produce diamonds. He didn't give up. Instead, he called the University of Florida. They ripped the guts out of the machine and replaced them. Voila - a real diamond machine - no kidding. Now he's built 27 machines, with 250 planned. The General recalls his first meeting with DeBeers: "When I told [the DeBeers guy] we planned to set up a factory and produce these, he turned white... They knew about the technology, but they thought it would stay in Russia and nobody would get it working right. By the end of the conversation, his hands were shaking." Flawless Diamonds - $5 a Carat Jeff Van Royen, a senior scientist with the Diamond High Council (the official representative of the diamond industry in Belgium), didn't get much sleep. He stayed up almost all night scrutinizing stones from Apollo (www.apollodiamond.com), the "other" diamonds-in-a-lab outfit. "I think I can identify it," Royen said, speaking about the difference between Apollo's stone and traditional diamonds. "It's too perfect to be natural. Things in nature, they have flaws. The growth structure of this diamond is flawless." Apollo is onto something. The diamond industry admits that it is not possible to identify Apollo's diamonds as any different from "regular" diamonds using the standard gemological equipment. What's a top-quality one-carat diamond worth? Many thousands of dollars. Apollo's cost of production is $5 a carat. Whatever price an Apollo diamond ends up selling for, chances are the company will turn a ridiculous profit. Real-World Testing How do actual dealers in the States feel about diamonds that are not from DeBeers? "Nobody cares if it's from DeBeers. My clients just want a nice diamond," says Kevin Castro, a U.S. dealer. "If you go into a florist and buy a beautiful orchid, it's not grown in some steamy hot jungle in Central America. It's grown in a hothouse somewhere in California. But that doesn't change that it's a beautiful orchid," Castro said. If Castro is right about customers just wanting "a nice diamond," the price of expensive diamonds could plummet in the very near future. And DeBeers' century-old domination could end just as quickly. Apollo's diamonds hit the market (in small numbers) in the fourth quarter of this year, and the Florida company, Gemesis, seems to be already offering its yellow diamonds (www.gemesis.com). If you don't need those fancy diamonds that are sitting in a box somewhere, then you may want to consider getting rid of them now, while you can still get top dollar for them. New technology is about to change the diamond world forever, it appears.

To: austrieconomist who wrote (17281)	8/20/2003 11:32:19 AM
From: Little Joe	Respond to of 39344

I agree that it is too early to go bearish on the market. The time will come and soon, I suspect. I hope I can pull the trigger at the right time. Little joe