Buying Argyle Pink diamonds for investment
Recently we hosted a webinar on argyle diamonds and in response we received this message from a client from Australia:
"I am a bit frustrated by the lack of clarity on the "markup" if I buy one. Or in simpler terms, if I purchased an Argyle diamond for $250,000 and turned around and sold it the next day or week...I know that I would HAVE to take a loss otherwise you would be out of business! But would I likely get $200000? $150000? $125000? A related question, how long would I expect to have to hold it to breakeven? (I know no one can answer this precisely...I am just looking for rough ideas and estimates based on past performance)"
This is a legitimate question since Argyle diamonds are purchased for the long term. Diamonds are not for those looking to buying and selling them like stocks. Collecting diamonds is like collecting art.
Some of our clients bought Argyle stones 10-15 years ago and their value has gone up 200 % and some even more.
I would say it takes about 3 years until you will break even when reselling. Again, you cannot look for a fast sale and making a profit after a few months. But when we’re looking at the long-term profit, you’ll make a good one.
The primary goal of buying an outstanding fancy color diamond is conserving part of your available assets in extraordinarily rare items which you love and don’t plan to part from them in the future. Still, they will appreciate it in the future, but it shouldn’t be the main cause for your purchase.
When buying an Argyle diamond, you will own a rare, disappearing heritage of Australia, which can not be reproduced or manufactured again.
In the case of Argyle diamonds, the price increase in the last 3 years was gigantic even at the trade level.
Even at high prices-Goods of 1P and 2P are gone and they are not available at any price.
Round stones of 1/10 and 1/5 per carat in all pink colors followed a similar pattern.
To give you an example of my personal experience, we used to buy big parcels of Pink melees which we used to sell to big jewelry brands that made diamond watches. Today, it is nearly impossible to remake a watch like this since you can not find these fine goods at any price.
30 years back The Sultan Of Brunei was the most important buyer of fancy color jewelry, including pink diamond watches.
According to my estimate, The Sultan owns some $5 billion worth of jewelry. When the Sultan and his two wives took their yearly visit to London, the Bond Street jewelers anticipated an exciting two weeks of extravagant purchases. His buying power and the desire of his wives to own fine color diamond jewelry were legendary. Even though the Sultan is no longer in the market for exceptional jewelry, the industry never depends on a single collector or a single promoter.
Great women can awaken the underlying desire to own beautiful fancy color jewelry like Lady Gaga wearing a Tiffany yellow diamond necklace for the Oscars. Other famous women can help create trends, like Marilyn Monroe, Liz Taylor, and The Duchess of Windsor.
Lady Gaga wore the 128 carat Tiffany diamond necklace that was worn by Audrey Hepburn in the past.
The legendary actress Elizabeth Taylor was also a great promoter of diamond jewelry.
She had a fabulous collection that was sold after her death for $116 million at an auction in New York in 2011. Some items reached 10 times the original estimate, and part of this money was given to a charity in Botswana.
Trends of great jewelry build up only after years of incubation, and not overnight.
Celebrities add a lot to the value of jewelry, but pink diamonds are still shining on major events. Today, auction houses are selling second-tier goods with the wrong assumption that the market is looking for lower-quality jewelry, but still presents a lot of fancy color jewelry, with a mixed success rate.
Graff said once ”you can not make great jewelry without pink diamonds, as they are the horses that pull the carriage.”
When we launched our first website in 1998, one of the first fine pink stones we sold on our website was 1.10cts. Fancy Deep Pink. It was a beautiful stone which we sold at $70.000 per carat. It was inconceivable, at the time, that we would be able to sell stones valued at more than $2,000,000 through our Leibish.com website.
The Argyle Sakura Diamond: 1.84 carat Pear shaped Fancy Vivid Purplish Pink diamond which Leibish & Co. won at the 2020 Argyle Tender. The stone was sold almost immediately.
The Sakura diamond was the ultimate beauty. A unique Argyle Tender stone of exceptional rarity.
As the very last Argyle Tender is approaching now, with no similar goods available to buy on the market, the desire to own a Tender stone is stronger than ever.
Shopping habits have changed, but the desire to own something remarkable remains.
We all try to find something unique and rare, something which can not be copied, something that no one possesses. Fancy color jewelry is a statement and is what helps you “stand out.”
After the break in public ceremonies due to Covid limitations, the underlying desire to look glamorous is awakening again.
White diamond prices have been stagnant for many years but today, even these prices are rising steadily.
As Marilyn Monroe famously sang “Diamonds are a girl’s best friend.”
And they still are!