The Return Characteristics of Diamonds

[MachineGhost]

We outline the ethical considerations surrounding the trading of diamonds, the metrics used to value diamonds, the history of diamond trading, and the current market structure. We provide an analysis of the underlying risk and return characteristics of several individual diamond types. We show that diamonds exhibit low CAPM and Fama-French betas and exhibit low correlations with gold, the S&P 500, long-term U.S. bond prices, and U.S. inflation.

https://papers.ssrn.com/sol3/papers.cfm ... id=2195728

[globalcash]

Are diamonds fungible already?  Gold is great cuz 'God doesn't make it anymore'.  But doesn't the ability to synthesize diamonds...a method they constantly improve on...undermine diamonds as a long term investment?

[MachineGhost]

Are diamonds fungible already?  Gold is great cuz 'God doesn't make it anymore'.  But doesn't the ability to synthesize diamonds...a method they constantly improve on...undermine diamonds as a long term investment?

Synthetic diamonds are perfect diamonds without flaws, so they are easily detectable and are worth much less than natural.

[l82start]

i don't know much about diamonds but isn't it a fixed game? i think i heard that there are one or two company's that buy the vast majority of all "valuable" diamonds and drive up/control the values of the rest to suit their needs by keeping them off the market and out of the accounting.

[MachineGhost]

Are diamonds fungible already?  Gold is great cuz 'God doesn't make it anymore'.  But doesn't the ability to synthesize diamonds...a method they constantly improve on...undermine diamonds as a long term investment?

And to make them fungible, you just have them assayed by one of the reputable grading services, laser inscribed with a serial number and then sealed in a tamper-proof container just as with other collectibles.

[MachineGhost]

i don't know much about diamonds but isn't it a fixed game? i think i heard that there are one or two company's that buy the vast majority of all "valuable" diamonds and drive up/control the values of the rest to suit their needs by keeping them off the market and out of the accounting.

You're talking about De Beers and Anglo American.  More or less, but they were sued and have been slowly losing control of the market.  But you can avoid that irky question by only dealing with colored diamonds.

[FarmerD]

You're talking about De Beers and Anglo American.  More or less, but they were sued and have been slowly losing control of the market.  But you can avoid that irky question by only dealing with colored diamonds.

I thought clear diamonds can be "colored". I remember hearing of the radiation incident at Wright Patterson AFB in 1986 where some dentist got the idea to immerse clear diamonds in Americium-241 to color them.  Some of the Am-241 got spilled and a few people got exposed. 

[MachineGhost]

Ice Removal
How easy is it to fence $50 million worth of stolen diamonds?

http://www.foreignpolicy.com/articles/2 ... ?page=full

[smurff]

You're talking about De Beers and Anglo American.  More or less, but they were sued and have been slowly losing control of the market.  But you can avoid that irky question by only dealing with colored diamonds.

I thought clear diamonds can be "colored". I remember hearing of the radiation incident at Wright Patterson AFB in 1986 where some dentist got the idea to immerse clear diamonds in Americium-241 to color them.  Some of the Am-241 got spilled and a few people got exposed. 

White diamonds are often colored-treated via irradiation.  All those blue and champagne diamonds in jewelry that came on the market about a decade ago--nearly all were irradiated.