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March 12, 1999

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Subject: Re: Diamond Rings
Author: bpaulsen

Oh boy... First off, CONGRATULATIONS!!!! You're taking a wonderful step and you should be extremely happy about this!!!

First, check out http://www.wam.umd.edu/~sek/wedding/mlynek.html

Now, back to the diamond. I've had the fun of going to New York's diamond district and my experience is roughly the same as yours. (Actually, it's probably worse - I felt that the people who weren't honest enough to become used car salesman ended up selling diamonds.) Picture this as a scenario: a salesman tries selling you a used car without you being able to see the car and you just have to take his word on how good it is. He tells you a price and then you try to bargain down from that price. This is roughly how the diamond business works.

Now you may argue, "Hey, I get to see the diamond", but honestly, you don't know how to value it and neither do I. The problem is that we aren't trained professionals, and we also have the whole emotion issue working against us (i.e, we want the best for our future wives.) Trained professionals can see the difference in diamonds, but they can't see them without a loupe (and VERY few amateurs know how to use a loupe correctly) and they CAN'T tell the difference between color grades without other stones to compare them to. Finally, the lighting in the jewelry store will make a Coke bottle look like a million bucks. Basically, you are fighting the jeweler on his home turf. Very difficult for a Fool!

How do you level the playing field?

1) GIA certification. Insist on it. If they can't provide it with the stone, insist that the purchase be contiginent on certification from an appraiser that YOU pick. DO NOT ALLOW THE JEWELER TO PICK THE APPRAISER!

"Why shouldn't you allow the jeweler to pick the appraiser? Well, I'm sorry to say, but their "house" appraiser is probably his brother working across the street."

Why shouldn't you allow the jeweler to pick the appraiser? Well, I'm sorry to say, but their "house" appraiser is probably his brother working across the street. The appraiser will naturally tell you what a great deal you are getting and you would be a fool (small f) not to buy the diamond now.

How do I know this? Well, I did my research and found a very highly respected appraiser in my area and had him examine the diamond. The diamond was about 4 color grades off from what the jeweler represented it as, and the appraiser felt embarrassed that he had to deliver the bad news. Unfortunately, I also had to eat the $125 appraisal fee because I was young and naive. So, tip number 2: if the diamond isn't GIA certified and you REALLY, REALLY want it, offer the jeweler this deal, "If the appraiser agrees on the specifications (within one grade) then you will pay for the appraisal. Otherwise, the jeweler can keep the diamond and he can also pay for the appraisal cost. This will save you a LOT of heartache and hassle.

By the way, when I was negotiating for this bogus diamond, the jeweler knocked down the price of the diamond from about $6000 to $4500 and he insisted that he couldn't go lower because he would be selling below cost. After the appraisal came in, he said that he would be willing to part with the diamond for $3000. I quickly left his place.

Anyways, back to the lesson: why do we insist on GIA certification? First off, GIA doesn't sell diamonds and doesn't place a price value on the diamonds. All they do is measure the different specifications of the diamond and they do it with cold, hard numbers. Basically, they take all of the guesswork out of figuring which diamond is better than the other. The simple fact is that on our own, we would be VERY hard pressed to decide which diamond is worth more than the other, but if one diamond has better specs than the other one, they could differ in price by many thousands of dollars. And the difference might only be discernable with a microscope! You definitely want a VERY qualified lab to decide the difference for you! Again, GET GIA CERTIFICATION!!!

Now, you say that you don't want to cut corners, but in reality, EVERYBODY wants to cut corners. If you didn't, you would just head into the Smithsonian and try to buy the Hope diamond. Well, you say, you don't need a diamond quite that big. We just cut a corner! Now it's a matter of deciding which corners you can safely do without and which are necessary.

First off, figure out what shape of diamond you want. E.g., emerald, round, oval, solitaire, heart, etc. If you don't know what shape she prefers, send in one of her girlfriends to find out. Also have her figure out what size she would like. Since you mention your budget is around 4-5 thousand, I'm assuming you want at least one caret. Be warned that the price per caret takes a BIG jump at the one caret level. Hey, these diamond guys aren't stupid - they know that one caret is a big psychological point and they exploit it.

Now, the first C where you can REALLY afford to skimp is clarity. Unless your girlfriend plans to carry a loupe arround with her and use it when she shows her girlfriends, you don't need better than SI1 (SI2 for really big stones). The SI level is where you need a magnifying glass (such as a loupe) to see the inclusions (i.e. flaws). If you get a higher grade, you are only paying for fewer flaws UNDER A MICROSCOPE. Unless you plan to look at the stone regularly under a microscope, this Fool thinks your money is better spent elsewhere.

The second C where you can afford to skimp is color. Did you know that once you set the diamond, every diamond is going to look white down to about an I grade? In other words, the really, really white colors (D, E, and F) will only look better than the lesser high quality stones (such as G, H, and I) if you don't mount the stone. I'm going to make a big assumption here, but I'm guessing that you are planning to put the diamond in a ring, aren't you? Well, you aren't going to be able to tell the difference between the stones once that happens. However, your pocketbook will be able to tell the difference.

These are two BIG secrets that the diamond industry would rather not have you know - that is, color and clarity are not worth it beyond a certain point. Yes, if you are a collector of fine diamonds and store them in a vault, then yes, you should buy these really high grade diamonds and keep them in the vault. However, if somebody plans to WEAR the diamond, then you shouldn't buy one that belongs OUT of a mounting and in a vault to fully appreciate it.

Now that we saved the money on the most expensive of the C's, where do we spend it? Caret (you probably have a size where you don't want to feel cheap) and cut. Caret is pretty easy to decide. Too small and you feel cheap, too big and you feel garish.

"These are two BIG secrets that the diamond industry would rather not have you know - that is, color and clarity are not worth it beyond a certain point. Yes, if you are a collector of fine diamonds and store them in a vault, then yes, you should buy these really high grade diamonds and keep them in the vault."

Finally, cut. The cut of the diamond is probably the single biggest factor on determining the "look" of the diamond. A well-cut diamond (and please refer to the link for what makes a well-cut diamond) will sparkle in under any light and catch almost everybody's eye. A poorly cut diamond will make even a D-color, internally flawless diamond look like cheap glass. The cut of the diamond basically will determine how the light bounces around inside and refracts to give you the fire and brilliance that we associate with diamonds. What gets even better is that a well cut diamond will add only 10-15% to the cost of the stone. This is about the same cost that you would incur if you went up one color grade and one clarity grade.

Finally, for advice on how to shop (and I'm going to assume that you are near a big city with it's diamond district): find a store that deals exclusively with GIA certified stones. Call them up about a week before you intend to look at the stones and tell them roughly what specifications you are looking for and be as specific as possible. Tell them that you will visit at X time on Y day and try to pick a time when the store won't be busy (ask them what time that is if you don't know) If they are a good store, they should arrange to have a selection of stones that are very near your criteria. Then all you have to do is pick the one that looks the best (this will almost always be the one with the best cut) and if you can't tell which one looks the best, which is possible with the store lighting, choose the one with the best dimensions as specified by the GIA specifications.

One last word of advice, because you are dealing with GIA stones, the amount of haggling you can do with these jewelers won't be nearly as great as those without GIA stones, but this merely means that you will be paying closer to true value for the diamond than you would have otherwise.

Good luck, and again, congratulations,

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