VOLUME 32, NUMBER 3 FALL, 2014 Gemstone Forecaster NGC P.O. Box 42468 Tucson, AZ 85733 1-800-458-6453 1-520-577-6222 Ten Guidelines to Gem Collecting by Robert Genis TABLE OF It’s been over 30 years since we people in the business too. Try CONTENTS first started creating these doing a few small deals to see if guidelines. In the early days of you are comfortable with your the 70’s and early 80’s, the dealer. You will quickly learn if Ten Guidelines to beginning of the gem investment the gems look like the Gem Collecting industry was born. When photographs they showed you on diamond markets and gem the internet or not. Did the gems markets crashed in the 1980’s, come with the promised grading Latest Gemstone most of the investment firms went reports? You can learn a lot about News: bankrupt. There were so many dealers in how they treat you with Colored Diamonds: companies and so many theories, the first few deals. White we decided to try and create Pink some guidelines that would work 3. Gemstones are primarily suited Blue over time. for the sophisticated individual Colored Gems: with a substantial portfolio. Emerald Let’s take a look and if any of Place no more than 10%-15% of Ruby and Sapphire these guidelines should be your portfolio in gems. A changed. beginning portfolio may cost you Gem News $10,000 (one or two gems). A Rio Tinto Colored 1. Learn to love gems for their well-diversified portfolio will run Diamonds to beauty, portability, and privacy. between $25,000-$100,000, or Smithsonian Of course, this remains the higher. Arizona Amethyst definition of a collector. It's the Still valid today. client that excitingly opens up the Gem Robbery gem paper is a true collector. 4.!Do not buy a colored stone Chinese Diamond Naturally, the concentrated wealth without an American Gemological Thief Arrested gems offers and privacy from Laboratory (AGL) Colored Stone peering eyes are a major attribute Grading Report. Not all colored Burma of gem collecting. What other gemstone laboratories are equal. Jade scam asset could Bill Gates or Carlos Beware of most grading reports Jade mines reopen Slim hold their entire wealth in other than the AGL. their hands? In the past 30 plus years, many Burmese beauty labs have come and gone, queen takes ruby 2. Align yourself with a however AGL remains the 'gold crown knowledgeable expert. standard." In 2009, Cap Beesley There are many good people in left AGL and it was taken over by the gem business. However, Chris Smith. If you really need a there are many less than ethical country of origin determination, I WWW.PRECIOUSGEMSTONES.COM [email protected] GEMSTONE FORECASTER NEWSLETTER SUMMER 2014 still trust AGL to be the final arbitrator. AGL is companies went bankrupt. I thought the best also the only colored gemstone lab with a chance were the new computerized networks workable and comprehensive grading system. that brought together buyers and sellers over the This is critical if you are a new collector or new electronic medium. Regretfully, it never buying over the internet. really worked for colored gemstones because you could not buy these goods sight-unseen. I 5.! Do not buy a diamond without a Gemological contend price lists and computers made white Institute of America (GIA) Diamond Grading diamonds more liquid. Of course, the spreads Report. are nothing like you get in the equity markets, Over the years this has become the industry but top can get a fast cash price for your standard. Never buy a colored diamonds diamonds with GIA grading reports. Colored without a GIA Grading report. White diamonds gemstones are liquid, too, but the spreads are are almost fungible and can be easily purchased gigantic and most would only sell at below on the net. wholesale only if they were desperate. It's much smarter to slowly liquidate your goods and not 6.! Be sure you are buying at near-wholesale need the money. prices. Subscribe to The Gemstone Forecaster and other publications. 9. Buy the best you can afford. In up markets, Like laboratories, gem pricing guides have come "the best appreciates the fastest". and gone. The main one used today is the In 1903, Charles J. Phillips wrote Stamp GemGuide, but regretfully it is wholesale only. Collecting as an Investment with his blueprint for You must have an industry proof to get his data. investing success. His first rule was Rarity- However, you can always ask your dealer to ensure you are buying rare, sought after items. send you the price matrix of the gemstone you In reality nothing has really changed in over 100 are considering. The Gemstone Forecaster years. Remember, the rarer the gemstones, the prints retail prices of the major collector stones more valuable, the more likely to retain value. A annually. Simply divide by 2 to get to wholesale. perfect example of this are colored diamonds. The earth produces 10,000 white diamonds 7. Beware of internet auction sites. Remember, before we discover one colored diamond. That’s if it sounds too good to be true, it usually is. rare. Many dealers make false claims. What do you expect from stones for a few dollars per carat? 10. Beware of boiler room gem scams. Watch This is a brand new, relatively speaking, which out for Canadian firms with fake "look-alike" was added during ascendency of Ebay. certificates and bogus price lists. Does anyone really think they can buy Burma Funny in hindsight, but we never got on the ruby, Kashmir sapphire and Colombian emeralds internet to sell gemstones. Many do not for $5 per carat? You would be surprised in how remember the early net days of 1995. The many did and still do today! Caveat Emptor. primary culture was to share information, not make a profit. If you attempted to sell 8. View your gem portfolio as a long-term something, you were ostracized from the hedge. Allow time to liquidate. Gems are similar burgeoning community. Seems quaint now. At to real estate, rather than precious metals. any rate, we put up my web site to help Proper portfolio planning can alleviate this Americans from being screwed by Canadian potential problem. Gems are instantly liquid, but boiler rooms. The site was 100% informational. at a discount. We were tired of explaining to people who called In the beginning of this industry, many daily about their "boiler room" purchased goods companies tried various theories to create and would simply direct them to the site. Have liquidity in the gem market. Many companies we stopped these crooks? No, they are now offered "guaranteed-buybacks." This worked operating with impunity in England. during rising markets but when the markets Remember, if anyone cold calls you, simply hang turned down and everyone wanted to sell, the up. WWW.PRECIOUSGEMSTONES.COM [email protected] GEMSTONE FORECASTER NEWSLETTER SUMMER 2014 11. Specialize in no heat, no clarity enhancement discovered the 23.82 Pink diamond. It is called and no enhancement gemstones. the ‘Lesotho Storm’. Last year they mined the In a way, this new guideline is similar to 9, 36.06 ‘Pink Storm’. however, we feel it deserves its own number. It doesn't take a rocket scent to figure out these Blue Diamonds stones are rare. Probably 99% of all emeralds The 12 carat, internally flawless (IF), Fancy Vivid are entreated and 95% of all ruby and sapphire. blue diamond is now on display at he Natural You can choose spinel and garnets because History Museum in LA. The stone will be there they are not normally treated. These goods are until January 6, 2015. I am not sure if you can like the ultimate hedge because people will want see this at the display, but the stone them even in a bad market. This is less phosphoresces orange-red. This is very similar important for jewelry only buyers. to the Hope diamond. It is unclear why these two fluoresce red when most blue diamonds Summary fluoresce blue. If you live in California, check it These guidelines are not the only way to collect out! gemstones. There are many theories being used in the market as we speak. However, if Colored gemstones you are a new collector, by following these few Emerald simple guidelines, gem collecting can be fun and A major emerald trader Luis Murcia was found potentially profitable. killed in central Colombia. This assassination sparks fears over an escalation of violence Latest Gem Market News surrounding the country’s lucrative emerald Colored Diamonds business. Murcia was found dead 20 miles from White Diamonds Bogota. His body was lying next to his armored White diamonds continue to slide along with the car and had been shot seven times. His precious metals. They have been in a downward bodyguards were conveniently missing. trend since 2011 and are off approximately Murcia was one of the major players in 25-30%. Colombia’s “Green Wars” of the 1980s during Petra diamonds of South Africa recently found a which competing emerald miners, joined by 232 carat white diamond. The stone is reported paramilitary groups and private armies, waged a to be a D color. It is expected to be auctioned war in Colombia that killed more than 6,000. later this year and should bring between $10-$20 This is the second major dealer to be killed this million. year. Martin Rojas was assassinated in May. Pink Diamonds Ruby and Sapphire The 30th Rio Tinto Australian pink diamond The Burma ruby and sapphire situation remains tender is making its world tour.