Intricasies and risks of diamond cutting

I received this from my cutter the other day. It has since been published as an article on Pricescope. Since I ended up buying a large part of this parcel I though you would enjoy knowing about how these bargains came to be.

The intricacies and risks of diamond-cutting

This is the story of a parcel of rough diamonds, which we bought in February.

1. The beginning – assessing the value of rough

This February, we were offered a very nice parcel of Botswanan rough. The size of the stones ranged from 2.60 up to 4.60 Carats, 42 stones in total. With most of the stones being makeables, thus returning only one polished stone, we were looking at the possibility of cutting about 42 stones with a finished weight between 0.70 and 1.75 Cts.

The color of the stones was very hard to estimate, since the rough seemed to have a lot of colors in the surface. Talking to other cutters, we learned that this is normal with rough from Botswana. However, we tried to estimate the exact color of the stones. If we would give a D color the value of 1, E the value of 2, and so on, up to J the value of 7, we estimated an average color of this parcel of 4.58, or an average of G-H in color.

These stones also contained a lot of naat, and inclusions, which were difficult to judge, and we estimated the average clarity of the parcel as SI1. Figure-wise, with IF being 1, VVS1 being 2, and so on, we thus estimated this parcel at an average clarity of 6.

Quickly estimating the weight of each finished stone gave us a final estimated weight of 47.90 Carats, thus a yield of 34.65% from the rough.

2. The decision – to buy or not to buy

On the basis of the above estimation of the outcome, we calculated the final value of the polished, and compared it to our cost. Seeing that we would end up with a lot of stones with a highly desirable color-clarity-combination, and that we foresaw a profit of 15% on this parcel, we gladly bought the parcel.

The decision was quickly made: we had to buy this parcel.

3. The result of cutting

After cutting the stones, we always estimate the stones ourselves before shipping them to AGS. These were the results.

In weight, we ended up with a total finished weight of 48.94 Carats, thus a yield of 35.40%, which was a tad higher than the expected 34.65%.

In color, we estimated the final color (in our figure-system) at 4.53. We had estimated a color of 4.58. Roughly, we could say that we ended up exactly with the average G-H-color, which we had predicted.

In clarity, we had predicted a clarity of 6, which stood for SI1 in our system. After cutting, we estimated the final clarity at 6.21, thus a little lower than SI1.

All in all, we were very happy with the outcome, although the slightly lower clarity already lowered the $-outcome of our parcel by 6%. Still, we did consider this a good buy, especially since we are very comfortable with our estimates before sending to AGS, and we generally get the same results on our grading reports.

4. The final grading of AGS

To our astonishment, the grading of AGS seemed to have become a tad stricter than we were used to in the past. These were our results.

In color, in stead of the predicted color of 4.53, we received an average grade of 5.12, thus an average of H in stead of G-H. Generally, we have the experience that AGS gives a slightly better color-grade than our estimate, and this difference is very surprising to us.

In clarity, we predicted a clarity of 6.21, and AGS graded the parcel at an average grade of 6.58. Normally, we are used to AGS grading clarity slightly stricter than our prediction, thus this does not surprise us at all.

However, where we generally get a somewhat stricter grade on clarity, and a slightly better grade on color, we now got a stricter grade on both.

When looking at this dollar-wise, the picture becomes problematic. Before sending the stones to AGS, we estimated our return to be 94% of our original prediction. With the resulting AGS-grades, our return now is only 83% of our original prediction.

We had estimated to turn a profit of 15% on this parcel. Now, it turns out to be a loss of 5%.

5. Conclusion

It is frightening to see how a slight error in the estimation of rough can make such a big difference in dollars.

Now, this is not something to mourn too much about, since sometimes estimates can be incorrect in the other direction too, and this would lead to unexpected profits.

And, the good thing is, that we now do have a number of very interesting stones available, in highly desirable colors and clarities, and these should be very easy to sell.

I have many of these stones, from .93cts to 1.56cts and they are all of them incredibly beautiful and great values in hard to find sizes. We will be sending the list out to our email newsletter clients and putting the list on our site in the next few days. If you are looking for diamond in these sizes that is affordable, you will want to call us at 1 800 524-7904 in the near future!

Wink

P.S. Look at the incredible dispersion in the the 1.56ct shown above. One of the things I love about Paul's stones is the fantastic dispersion.

I lost a Dear Friend today

I know that this is not jewelry related, but it is Wink related and I feel like sharing.

I had to put down my old black lab, Flusher, this morning. I have known for months that our last hunting season was going to be the last for us. He was fourteen or so years old, which is pretty old for a lab and although we walk him a couple of miles or so every day he has been slowing down more and more.

Last year when coming out of the cattails with a duck you would have thought a train was coming through, his breathing was so loud. Still, he taught the new pup how to find a bird that went down in the thick brush, which might have taken her another year or two to figure out by herself.

My wife always worried that he would die in the swamp where we hunt, I always secretly wished he would so I could just bury him there where he spent the happiest hours of his life. Alas, it was not to be. This morning he could not even walk all the way back to his pen to eat breakfast after his walk and my wife called to tell me it was time.

I left work, came home to find him again ambulatory, threw the bumper for him a few more times. He would hustle to it in his awkward semi-rigid hobbling gate, winded after even the five yard tosses I made, stand over it for ten to twenty seconds then pick it up and slowly walk back to me with his last retrieves.

This once proud and commanding speciman of all that is good about a labrador was all done on this plane and I shall miss him. I have many wonderful memories though.

One year for Thanksgiving I went alone with him to the swamp where we sat and waited paitently for hours for a duck or two to come by. Nothing. Nada. Suddenly he stood up and looked behind me. A lone mallard had set its wings and was coming in. It was the only duck we saw all day, and without Flusher I would not have seen it until long too late.

Another year we were sitting quietly with my wife and a friend looking out in front of us to a beautiful empty blue sky. He started looking around, first one direction, then another, and acting very strange. At first we saw nothing, then a few specks here and another few there and suddenly the sky was full of thousands of ducks, two, maybe three or even four thousand ducks decending towards the large swamp that we were in. As they came lower and lower the sound of their feathers whistling in the wind became first a distant whisper then an almost tumultous vocal singing. The song would change, raising and falling in tempo and in sound depending on whether they were decending, turning, circling for one more look, or raising to look here and there over the swamp for that perfect landing place. Birds were landing all around us, and eventually on us. Swoosh, near silence, shish, sigh, swoosh, swoosh, sigh, splish as they finally settled into the water in a short skid to sitting from flying.

When the birds took flight and dissapeared we sat and talked long after the retrieves were made about what an incredible experience it was to have seen so many birds all at one time and in one place. What an exciting moment, and what a treasure that I have this memory of my friend to warm my heart as I think of him now that he is gone...

Winkie don't do that!

Just got a phone call from Fedex.

Our client in (country name deleted) had us send him a new Vatche ring. Told Fedex that there should be no customs since it was a repair, not a new ring. Fedex called us to verify.

Dang Dude! I am not going to risk fines, bad publicity and possibly jail time to help you not pay your fair taxes.

Wish I could say it was the first time such a thing had happened, or that I thought it would be the last, but if I would lie to your government, why would you think I would not lie to you?

There are a lot of things Winkie don't do, helping anyone cheat the government of their city, state, or country are three of them.

Wink, who likes to sleep nights

From Nice, to GLORIOUS!

I am going to share some before and after stone pictures with you today. Here is the beginning. I have been talking with a delightful gentleman for some time who wanted to give his fiance a nice yellow sapphire as that is what she has told him she wants for an engagement ring.

He sent me this fairly attractive yellow sapphire. As you can see, it has a nice yellow color, but the make is off. It has a big window in the center of the stone and you can see an inclusion fairly easily.

As you can see the stone is actually a little "lopsided, with the culet way to one side of the center of the stone where it belongs. It weight 5.95cts but much of the weight was "fat" in the bottom of the stone and actually detracting, not adding to the beauty of the stone.

Here is a view of the stone looking at the width of the stone. Here you can see that the table is not parallel to the girdle, and is at a fairly significant tilt. For weight retention purposes, you will see that Richard Homer, the genius who recut this nice stone and made it a true GEM did not do much, if anything to correct this minor error. He was able to use his knowledge of light and how it travels within a stone to create and balance the look this gem deserved without removing a significant portion of the top of the stone to do so.


I am going to show you the recut width view now so that you can more easily compare the two photos. I see that I photographed the original view from one end of the stone, and the recut view from the other. Oh well! You can still see the tilt to the table, but look at the improved color, even from the side of the stone.


From here you can see that the culet is once again in the center of the gem, where it belongs. If you look carefully you can see that Richard has thickened the girdle on one end so that the pavilion of the gem can be cut in proper alignment to look wonderful when seen from above.




Okay, so here we have the beginning,
And here we have the end. Which would you rather have? Notice that the brownish hue is mostly gone from the stone and the window of course is closed, which makes the inclusion readily visible in the before dissapear in the after. The dark areas of extinction are gone too, and now the stone is lively and bright.

See you next week...

Frequently Asked Questions

Here are some of the questions that we regularly get from our clients. Not sure if this belongs in a Blog or not, but hey, just page down if this is not interesting to you...

We would also like to hear from you. Do you have any questions about how to buy a diamond or how to find a quality jeweler? If you have a question you would like answered, please send it to me at
Wink@WinkJones.com so that I can answer it for you.

Q: Why are you located in a little town like Boise?

A: I love to kayak, hike, camp, and just plain enjoy being out of doors and away from the maddening crowds, so do my wife and children. I think our lifestyle has a lot to do with us being so happily married for more than 30 years.

Q: How do purchases through you work?

A: Very easy. I can take your personal check, your credit card, or cashier's check. Once the funds are in my bank, I send you the product for twenty-one day inspection on diamonds and other gems. (Once you tell me the stone is yours, it IS yours! As a broker, I buy these stones for you, and do not wish to have to raise my prices by keeping a large inventory.)

Q: What is the guarantee?

Diamond Quality Guarantee – You can be assured of receiving beautiful, genuine, quality diamonds from Winfields. All our diamonds are “graded” by universal standards of clarity, color, cut and weight, and each gem you purchase from Winfield’s is accompanied by a grade and value certificated report from an industry recognized, reputable gem lab.

Authentic Colored Stones Guarantee– We unconditionally guarantee all colored stones to be accurately identified and weight and color description included. Stones are genuine unless specifically noted as synthetic or a simulant. Any treatments we are aware of will be noted. Stones such as sapphire and ruby, are heat treated unless specifically noted to be natural color and not heat treated in their description. Other stones such as blue topaz are found so rarely in natural blue that all blue topaz are considered irradiated to give them their color.

Recipient Inspection Guarantee – We want you to be pleased with your stone choice. Therefore we offer a pre-purchase inspection option. Upon receipt of payment security authorization, we are happy to send loose stones for your inspection. You have a twenty-one (21) day right to inspection and return and full refund of any deposits for any reason. Once a purchase decision is made, all sales are final and not subject to return or refund.

Total Satisfaction Guarantee – Gold and platinum jewelry carries a 100% “we’ll make it right or your money back” satisfaction guarantee on workmanship. Our craftsmen hold very high quality standards which we expect and you receive or we will remake the piece for you at no charge. Workmanship is warranted for one year.

Custom Made Heirloom Treasures Guarantee– We use only master craftsmen of the trade for custom made pieces. We offer the same 100% satisfaction guarantee on workmanship for custom pieces Workmanship is warranted for one year.

I also can help you with insurance through Jewelers Mutual, a company that works exclusively with jewelers. The rates vary state to state, but are usually lower than your homeowners. Once every two years you have the jewelry inspected by a store who works with Jewelers Mutual and resubmit your premium for another year's coverage.

Every purchase from Winfield's is accompanied by an appraisal that you can use either with Jeweler's Mutual, or with your homeowners if you prefer.

Q: How do I know you are going to be there tomorrow?

A: I have been here all of my life except for eight years with the Marine Corps that took me to Vietnam, and Brazil where I became enamored of the gem trade. I will be here as long as I live. You can check me out with the Better Business Bureau or the Chamber of Commerce, neither has ever had a complaint filed against me.

Q: Why are your prices so much better than others?

A: Because my thirty years in the trade have enabled me to find out who are the best suppliers, and to gain their trust and confidence. My word is my bond in a wonderful business that is still done on a handshake, and I am known both nationally and internationally by people I can count on to provide me with the best product at the best values, so that I can pass those tremendous values on to you!

Q: Why are you so easy to buy from?

A: Quite frankly, because I love what I do. I get up every morning excited that I get to help people like you pick out the glorious gem that will become the symbol of the love and honor with which you regard the recipient. Take a look at a few of the many testimonials that I have received and you will know what keeps my batteries charged!

Q: Can I legally buy from you withoiut paying sales tax?

As I write this I am not required to charge sales tax on any purchase that I send out of state. This does NOT excuse you from the requirement in your state to report and pay sales tax on your purchase if your state collects sales tax. Currently only an extremely small percentage of people do report their out of state purchases when filing thier state income tax forms, and there are still a few states that do not have sales taxes.

However, since there are literally BILLIONS of dollars worth of unpaid sales taxes at a time when state governments are desparate for funds I think you can expect some time in the near future that the states will begin to require that we vendors desclose who are clients are and what dollar amount was purchased. If this happens, it will NOT be optional for us to disclose, so please factor this in when making your purchases. You may get away with it for a few more years, but eventually you will have to start paying sales taxes on purchases on the internet.

Wink In The News

Here is a fun story from my not too distant past...

Last Monday while talking with a client I heard a lot of commotion in the hall and people talking about a flood. I looked out the window and sure enough my building was an island.

There was a burst water main at the head of the triangle my building is on and there was a LOT of water surrounding my building.

I decided to go for it and made a "First Decent" of Main St in Boise Idaho and am still the only kayaker in the world to do so. Film at eleven. Well, actually the film was at ten in Idaho, but I made two stations and have well over 100 clients call me or stop me in the street to share a laugh with me.

The building had over ten inches of water in the basement but fortunately was between tenants down there so no major damage was done to anyone's business, but the building will need a complete rebuild in the basement as the water ruined all of the walls as well as the carpets.

After my 80 seconds of fame the broadcaster said, "Well, I learned one thing from that. Always take your kayak to work."

Pretty good advice as far as I am concerned...

Wink

Note: I first told this story on Pricescope on the day that it happened. I just wanted to share it with my blog readers since kayaking is near and dear to my heart

Who do you trust?????

I was reading Pricescope yesterday and there was an interesting thread that talked about a certain individual who is always disparaging everyone other than himself who sells diamonds.

Several of the posters are upset about this guy's tactics, and the fact that so many people seem to listen to him. He gets great publicity and obviously has learned how to use PR to his advantage, but still finds it necessary to disparage any one else in the world who sells diamonds.

So, who do you trust?

I could tell you to look for testimonials, but this guy has a ton of them, even though he is a convicted felon who defrauded some investors who bought diamonds from him. So do all of the sites he complains about, heck, I have a bunch of them too.

So, who do you trust?

I could tell you to look at sites like Pricescope that are wonderful discussion boards primarily for consumers to go and find out who is trust worthy and to learn many things about diamonds and gems.

But hey, the person being talked about in that thread says that all Pricescope vendors are evil and that if you trust them you are as stupid as they are. If you believe him, that would be bad advice. (Personally I think going to sites like Pricescope is excellent advice, but then, I am one of those stupid misguided Pricescope vendors.)

So, who do you trust?

NO ONE. Don't trust anyone until you have done your homework. Then, trust but verify. When buying diamonds of over 1/2 carat insist on a lab grade on the diamond, preferably from one of the better labs such as GIA, AGS or PGS. I have had great results with all three of these labs, although it is no secret that I am currently at odds with the new GIA cut grading system. I have had not as reliable results with EGL and I just plain do not accept anything with an IGI paper on it as they have been consistently stinkers as far as I am concerned. A few of my colleagues tell me that they are cleaning up their act, and if so I will be pleased to see it, but many of the big players who use them use them BECAUSE they are lax, not because they are accurate as this enables them to buy cheaply and sell dearly to the detriment of their clientele.

Go to sites like Pricescope and read the discussions there and do searches for vendors in your area. Call or email the vendors that you are interested in talking with, and basically interview them for your business. Be quick to cut any who do not make you feel special.

Research what you are looking for and then go talk with your local jewelers. Many of them will be competitive with Internet pricing, especially if they know you have been on the internet looking and learning. It is always nice if you can get your jewelry done locally, as it relieves the anxiety of needing to ship things here and there, and it is nice to see your work in progress.

If you have a question about a vendor, you can usually ask on the diamond discussion boards and get many responses about good, bad, or indifferent experiences with the various vendors.

And of course, you can always trust me...