In Defense of Diamonds: Why Ira Weissman is Wasting His Time

 

There are times in one’s life when selfishness needs to be cast aside, when instincts of self-preservation are subjugated in order to defend one’s beliefs against a bully.  I came across diamond industry veteran, Ira Weissman’s, article ”7 Reasons Why Diamonds are a Waste of Your Money“ via Huffington Post Blog this week and felt an overwhelming need to right a wrong–to come to the defense of something that cannot defend itself from the inaccurate statements and sweeping generalizations made in Mr. Weissman’s article.

Reason #1

According to Mr. Weissman, “The most common misconception about engagement rings is that they’re some kind of ancient tradition that’s deeply embedded in human history in societies around the world. This is completely false.”  Well. . .actually, around the 2nd Century AD, the Romans first used rings as tokens of betrothal.  During that time, diamonds and colored stones were extremely popular and though diamond cutting techniques were not sophisticated, there is evidence showing that solitaire rough diamond rings did exist (See Black, J. Anderson, A History of Jewelry: Five Thousand Years (Park Lane 1981)).

I will acknowledge the fact that De Beers did propel the popularity of the engagement rings to its current height with some excellent marketing and ad campaigns, but let’s not make sweeping generalizations about “human history and societies around the world” without researching said histories and societies first, shall we?  History aside, assuming that the practice of presenting engagement rings to symbolize love, betrothal, and commitment, is a tradition that was developed over the last century, I still fail to see what Mr. Weissman is taking issue with.  America is a young country, and just like older civilizations before us, the creation of traditions and practices that hold sentimental significance is an integral part of the evolution of any culture.

Reason #2:

“Diamonds are not an investment — they are a retail product like any other.”  Now, Mr. Weissman, assuming that we are discussing finished jewelry rather than diamonds, which are a commodity, there are retail products that depreciate in value the second they leave the store, and there are luxury goods that increase in value based on the basic principles of market economics.  A Chevy Impala will be worth less the day after you drive it away from the dealership, but a limited edition Aston Martin, however, will likely retain its value pretty well, if not appreciate in value, as long as it’s well cared for.  Another prime example of a retail good that not only retains value, but appreciates, is the Hermes Birkin bag.  Point made.

I assume you would retort with something along the lines of, “Limited edition, sure.  But diamonds are mass-produced and readily available.”  I beg to differ.  Diamonds are a limited resource.  The sheer fact that it took the perfect combination of temperature and pressure for carbon to transform into diamond’s unique crystal structure over billions of years, hundreds of millions of years for the diamonds to be transported by kimberlite and lamproite from the earth’s mantle, through the process of emplacement, to the earth’s crust where they can be mined by humans, renders the diamond a rare and awe-inspiring phenomenon indeed.

I am not claiming that all diamonds are investment-grade.  Just like some investments make money and others fail, one must invest well for a diamond to appreciate in value.  I would never buy shares in any old company and expect for a 15% return in one year, or ever.  Would I buy a 2 carat, L colored, SI1 and call it an investment?  Of course not.  However, with proper investment advice, certain diamonds will appreciate in value.

Diamonds, just like any other investment have to be bought low and sold high.  There must be demand in the market and a rare, high-quality stone will appreciate in value like any other commodity over time.  Given the recent demand for diamonds in China and India, diamond prices increased by 10-20% in the first half of last year alone.  Appraisers are quite familiar with the increase in diamond value, which is why most will automatically add 15% to the appraisal value in order to arrive at the replacement value of a diamond.

Reason #3

Mr. Weissman then cites integrity of the diamond dealers and their willingness to engage in unsavory behavior in order to turn a profit as his third reason why diamonds are a waste of money.  Diamond dealers like Mr. Weissman sell to manufacturers, designers, and wholesalers, not directly to the consumer.  The diamond dealers margins are absorbed by the manufacturer or wholesaler as their cost of doing business.  Every stage of the industrial process has a built-in margin, everyone needs to make some money along the way.  To argue that profits should not be made by suppliers in the production chain suggests a naiveté about capitalism that I would find alarming coming from a diamond investment advisor.  On the other hand, if reason #3 was an attempt at undermining the integrity of other diamond dealers in an effort to drum up business for himself, I’m afraid Mr. Weissman’s efforts fall short as well.  Do we really expect the public to believe that a disenchanted and slightly bitter diamond dealer is going to forgo any profits in his own business dealings?  I think not.

Reasons #4-7

If I wasn’t sufficiently appalled by the unresearched blanket statement about the history of engagement rings made by Mr. Weissman earlier in his article, please consider me fully horrified by his reasons #4-7, which range from unsolicited lectures on fiscal responsibility to sweeping statements about men and women’s motivations behind buying or wanting an engagement ring, respectively.  He supposes that men buy rings to “prove their manhood” or to keep their girlfriends “quiet for another year about marriage” and women are merely seeking a diamond as proof that they are loved.  Such unfounded stereotypes are about as insightful as those of a high school psychology student with a penchant for watching reality TV.  Perhaps reasons #4-7 clawed away at Mr. Weissman’s inner dialogue when he was proposing to his (poor) wife, but I have more faith in society than to assume they are all weak-minded sheep with inferiority complexes who can be herded en mass into the abyss in search of a little blue box.

For me, engagements rings remain a beautiful gesture.  If a man loves a woman enough to want to make her happy by purchasing a rare gem because she thinks its stunning, and if he is selfless enough to spend (whatever the amount) on a gift for her, rather than on himself, that is something worthy of praise, not ridicule.  As for the women, I doubt many of us would condemn ourselves to a lifetime with a horrid man we couldn’t stand purely for the sake of a diamond.  In case you didn’t get the memo, women are quite capable of funding their own diamonds nowadays.  So if the sparkly ring on our finger reminds us of how we fell in love and the man we fell in love with, I would say it’s money well spent.

I am a big proponent of loving what you do and believing in what you sell.  I left a career as a corporate lawyer in order to pursue my passions, jewelry, design, fashion and diamonds.  It is because I love what I do that I urge clients to make informed decisions by discussing things to consider before buying your first diamond, or the truth about conflict diamonds.  I would never sell something I felt resentment towards, nor would I hold my potential clients in such low regard.

Quite frankly, Mr. Weissman, if you are so disenchanted with your profession, perhaps the more effective solution would be to pursue another trade, rather than trying to fashion for yourself a niche as the “diamond Cassandra.”  After all, in life as in the purchase of diamonds, it is not the money that matters in the long-run, it’s the joy that one derives from the process and the relationships that one builds, that make for a life of fulfillment.

Big Kiss and Bigger Diamonds,

JZP