My Secret to Setting Record Prices for Diamonds

(ehudlaniado.com) - Over recent years, I have extensively discussed several key principles: the need for transparency in polished diamond prices; the importance of knowing transaction prices of polished before buying rough diamonds; the necessity for full disclosure of information about any diamond offered for sale; and above all, the central role that rarity plays in long-term diamond value. Together, these principles provide the framework to purchase an asset that has a resale value. All of the principles above were at play with each of my record transactions. Let’s take the Blue Moon for example (later renamed by the buyer, The Blue Moon of Josephine). I, along with several other experts, examined the diamond closely. We considered what could be polished from the raw stone, and then placed a bid for it based on our understanding of the market. “Understanding of the market” may seem like a vague description, so allow me to explain. When looking at a rough diamond, you need a great deal of expertise in order to assess the best way to polish it. With the possible outcome in mind, you valuate the potential price the polished diamond could be sold for. The latter requires carefully tracking the market, knowing transaction prices of diamonds of the same color, clarity, size and any possible irregularities the diamond may have. Armed with that knowledge, my company Cora International, placed a bid for the rough diamond that reflected its potential polished outcome, the cost of planning and manufacturing the rough diamond, target profit, which we subtracted from the expected selling price. We went through the same process with the 110.3-carats, Fancy Vivid Yellow, VVS1 Clarity, pear-shaped Sun Drop Diamond, and the same again with the more recent Unique Pink. Both diamonds were mined in South Africa. After winning the bids for these stones, we polished them with magnificent results. We submitted the stones to GIA and after the grading, asked the GIA to produce a monogram for the stones. A monogram is a detailed book which relates everything there is to know about the diamond, including its history and the history of similar diamonds. While this is not done for every diamond, at its core, it is precisely the process I have been advocating for diamonds in terms of transparency. Let every potential buyer know as much as possible about the diamond. With all this in hand, the diamonds were ready to be sold.