A couple more tid bits on fancies.
Who Buys Natural Fancy Colored Diamonds?
Considering how intriguing these diamonds are, the market that purchases them must also be intriguing. It is. From upper middle class people who want the incredible and unusual beauty of a 3 carat fancy yellow starburst cut diamond at approximately $33,000 to those international jet setters who will buy a 5 carat intense blue pear shaped diamond to wear to some occasion for $2,500,000, the buyers form a who's who of astute international consumers, investors and business people. The highest prices paid for these types of gems are at famous retail jewelry stores and high profile auctions. Often the richest consumers use dealers to buy for them lest their fame drive up the price of a particularly desirable stone.
More unexpectedly, there is a very fast growing section of this buying group who buy fancy colored diamonds and never intend to wear the stones themselves or have their names known by anybody. The unique concentration of wealth per carat, the fascinating beauty, and the fact that they have never gone down in value since prices have been regularly recorded make fancy blue, pink, red, green, purple and yellow diamonds the most singly unique and private forms of wealth known to man. If you could find 142, 1 carat fancy blue diamonds (1 troy ounce), all eye clean, the horde would be worth in the neighborhood of $21,300,000. Unfortunately, it would take several life times to collect that many one carat stones, if it could be done at all. By contrast that amount of money in pure gold would weigh a mere 4,437.5 troy pounds - over two tons!
Fancy Colored Diamonds: The Non-Traceable King of Value
Every form of investment or asset has a financial downside and upside. For people who are concerned with the problems outlined above, finding a suitable asset for both stable preservation of value and hiding it efficiently over long periods of time and with changing economic conditions has been difficult. Virtually everything that is bought or obtained with a paper or recorded trail (real estate, land, stocks, bonds, options, commodity contracts, CD's, savings account, etc.) can be located by attorneys, collection agencies, all levels of government and specialty government agencies and regulatory agencies such as the SEC. If it can be physically "found" through that paper trail, it can be confiscated, forfeited, attached, have a lien put on it, or any number of other legal things which effectively take the asset away from you. Also, many of these items can have wide value swings over time such as stocks and bonds. Other tangible items which can be easily hid (such as art work, objects d'virtue, rare coins, white diamonds, most colored gems, stamps, baseball cards and sport memorabilia, etc.) have values which often swing even more wildly than traditional "paper investments". Rare coins and white diamonds are prime examples of tangibles which can have very wide value swings over time. Others of this type of asset can have huge bid-ask spreads. Sports memorabilia is a perfect example of that.
Fancy colored diamonds, primarily through recorded auction market sales during the 1970's and 1980's, developed a track record that came to the attention of the well heeled consumer. Prices for blue, pink, yellow, green, red, and purple diamonds have never dropped. During that 26 year period there were wars, inflation, depressions, recessions, booms and busts, but prices never dropped.
Being the most concentrated form of wealth in the world, fancy colored diamonds also have the advantage of being so small that a fortune can be carried in the heel of a shoe, stored in a private off-shore safety deposit box or held as an asset by a foreign trust. In short, once hidden, they can't be found through the regular paper trail of most investments and assets. They are truly the non-traceable king of value. |
