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>It’s a perfect storm: you have too much supply, not enough demand

My wife lost the diamond in her wedding ring and we were talking about getting it replaced. I have two daughters in their early 20s and they were aghast at the idea of replacing it with another diamond. They were adamant that nobody should buy diamonds for jewelry and instead should use a synthetic stone. They claim that "everyone" (which apparently means everyone they are in contact with on social media) knows this. If this kind of thinking really is widespread among the younger set then I'm not surprised that the demand is dropping.

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This reminds of a Business 101 professor (former tech CEO) that I had in college. He liked to survey Freshman on their preferences. I don't remember the category precisely, but he was visibly taken aback and commented that "McDonalds" had never NOT been the #1 in one of the Freshman preference categories (I'm guessing it was for "favorite fast food", but I can't remember precisely). This struck me as a great way to keep a pulse on the market.

I bet he'd pick up the diamond trend if that was in his survey!

I got married a few years back, both of us in our mid 30s. I never intended to buy a diamond, and instead bought a sapphire engagement ring. Interestingly, it wasn't until AFTER we got engaged that I found out/realized that both her mother AND grandmother wore sapphire rings. Her 100 year old grandmother had been married multiple times, but her last and favorite engagement ring was a sapphire, despite having certainly received plenty of diamonds throughout her lifetime.

> "McDonalds" had never NOT been the #1 in one of the Freshman preference categories

The Beloit Mindset List annually captures the changing worldview of younger generations.

http://themindsetlist.com/2017/08/beloit-college-mindset-lis...

Great resource! Thanks!

Aside: Good God that list is cringy!

What it really puts into perspective is,

Fifty years from now, student loan derivatives will be the largest asset class, you'll be worried about teenagers spongling each other on the lacework, and you'll read an article about the graduating generation and find it pretty insightful.

Some of the list is applicable to people born from the start of 90s. Still cool, though

I was born in the early 80s and still have no idea what that westinghouse W radio thing is all about.

I was born in the early 70s and I have no idea either.

My bride wanted sapphire because she knew I was convinced of the evil history of diamond. 10 years later she demanded a big diamond to replace it and I realized she'd been seething all those years but compromised because she was playing the long game our marriage.

Sapphire is something you buy in bulk, in sheets, tubes, rods, or bar stock.[1] Every scanner window at Home Depot is a sheet of sapphire. You can drag steel tools across those all day for years without much effect.

[1] https://www.alibaba.com/showroom/synthetic+sapphire.html

That's too bad that she may have not been upfront with you from the onset :(

Crazy... So did the salesman at the jewelry store go into a whole speech about the "5 C's" of diamonds? (Clarity, carats, etc.) Can't believe how quickly he disappeared when I told him "oh sorry I'm not interested in a diamond."

Haha sounds about right!

This is precisely why I purchased my wife a diamond, it was worth every penny, I think she was proud of it for years, always showing it off. It’s not my place to judge her, it made her happy, feel loved and validated, and that was more valuable than the money.

The key is to buy wholesale online or you’ll get totally ripped off, the markups at places like Tiffany’s or Bloomjngdales are outrageous and are the biggest reason diamonds have poor resale value. You wouldn’t buy gold at a 10x markup but that’s precisely what people do with diamonds for some reason. Also don’t buy a diamond on credit, my wife and I had significant savings and no debt so it wasn’t like the diamond hurt our finances.

Of course everyone is entitled to get whatever stone (or no stone) they want! Diamonds seem to be falling out of favor so the article above doesn’t surprise me. I would put some blame on the diamond industry being too greedy, selling at outrageous markups and telling everyone a proper diamond should be “X months salary” where X has gone up by 1 every decade.

This is great. Use the same reasoning to get your wife to buy you a new Corvette C8. Tell her you need it to feel loved and validated, and that it's more valuable than the money. You will be proud of it for years and always show it off. It's not her place to judge you, it made you happy. She needs to spend at least 1 yearly wage on the car or else she doesn't love you.

She spent 9 months being pregnant with my daughter and suffered through labor, that’s more than a fair trade.

You spent those 9 months presumably working and taking care of her. That's more than a fair trade.

It is a common understanding throughout the history that women think it is not a fair trade, it is also the case that many men seem to think the women have it harder in the pregnancy period as easy as they may or may not be accused of having it otherwise. Therefore I think you need to add more of an argument for why it should be a fair trade, probably difficult given that when you are taken care of someone (unless in the Pulp Fiction manner) you are doing so because they have it significantly worse than you do.

what? whos worse? its 2 people busy with different things. thats why its a fair trade. its teamwork.

It's hard to imagine someone saying this if they've ever taken care of a pregnant woman all the way to term. Yes, it's teamwork, but the man gets the better end of the deal and it's not even close.

My wife bore us 7 children, but I still totally disagree with your argument.

What do you disagree with exactly?

I was blown away when someone told me they wanted a natural diamond. It seemed crazy to me, I don't get why someone would want to pay more for an identical (except for the fact that it was likely mined unethically) stone. I don't think any of my friends have a natural diamond but that's probably partially the people that I hang out with.

I've been poking my head in periodically and have yet to see the massive savings of lab-created diamonds, or even moissanite. I keep expecting that the market will have shifted—last time I expected it was when moissanite for jewelry's patent ran out—and one or the other will be down to only a little higher than low-quality replacements like CZ, but it's not happened. They still seem really high to me. Cheaper, yes, but still expensive. Especially lab-created diamond.

I mean I'm on board with not buying natural diamonds and all and it's not like I wanna buy any of these for myself anyway, but I don't think there'll be a full collapse in the natural diamond market until the two best alternatives put some serious price pressure on them.

[EDIT] just checked again, 0.75c and up lab diamonds of middling (by gemstone standards) quality or better sure seem to still be like $2,000+. And 0.75c is merely on the large side of "modest".

Large moissanite stones are vastly cheaper than equivalent-quality natural diamonds at trade prices; if you can afford a decent .75ct diamond, you can afford a 15ct moissanite. When cut correctly, moissanite is visibly superior to diamond in fire and brilliance. That's a large part of the reason why small synthetic stones aren't as cheap as you might hope - it takes about the same amount of skilled labour to properly cut a natural diamond, a lab-grown diamond or a moissanite. CZ stones are cheap and look cheap, in large part because they're crudely cut.

Yeah, I checked Moissanite again after the post and it actually has gotten pretty cheap. Maybe $400 for a pretty good 0.75ct. That's more like it, and yeah, probably is cheap enough that it's mostly the cut you're paying for.

I haven’t personally seen a moissanite with greater fire and brilliance than a really well cut diamond, although what you said about the cut probably applies here since moissanite has a higher refractive index. Where would you shop for high quality moissanite? So many of the places that sell them seem to focus on being cheap unfortunately.

CZ also has the problem of being softer and more subject to environmental forces, as gems CZ ages much faster.

China disrupting world’s diamond sector, tapping sophisticated technology to produce cheap synthetic alternatives https://www.scmp.com/business/article/3020399/china-disrupti...

Seems pointless for a country to have foreign exchange used to import carbon crystals when they can be made locally.

The suffering increases its value in their mind. They're not wearing a stone on their finger, they're wearing the effort and pain of many people.

In whose mind? I'm 35 and all of my married friends have diamond engagement rings. I don't think any of them think that way.

"they're wearing the effort and pain of many people"

well, mostly the husband's

The problem with man made diamonds is that like any technology, they'll get progressively cheaper as the production technology gets better. We saw that in a huge way when De Beers rolled out their Lightbox line and undercut pretty much everyone.

Is that really a problem? It sounds perfectly fine to me

It’s a problem if you want to consider something such a nice jewelry or a wedding ring as an investment. I would guess that some people buy the real thing because it’s less likely to lose its value over time?

That’s just my guess.

I'm not sure what you mean by "less likely to lose its value over time". If you buy a natural diamond in retail it lost more than half its value the moment you bought it. (it was never worth the retail price to begin with) As an investment, it's a terrible idea.

I'm not saying it's a good investment, to be clear I know absolutely nothing about diamonds. I was just sharing a potential reason why people may favor natural ones over manufactured ones. If the process to make synthesized diamonds becomes cheaper faster than a natural diamond lose its value, then you might be better off with the natural one if you consider it strictly from an investment point of view. Losing 50% of its value after purchase may be better than losing an potentially more after a few years once the industry figured out a way to manufacture diamonds at a way lower cost.

And that's a problem how?

Speculators will speculate - what matters is that more goods are accessible to more people.

It's a problem for the person who doesn't want their good to depreciate.

Because mined diamonds have at least some resale value compared to the lab grown diamonds prices - which are a race to the bottom.

A 1 carat diamond costs about $6000, a 1 carat Moissanite stone costs about $600. Even if you could resell the 1 carat diamond for $3000 (you can't, they depreciate in value once you leave the store faster than a car when it leaves the lot) it would still be 3-4x cheaper to buy the Moissanite stone.

I can understand someone preferring a stone formed by natural processes over æons and discovered by a miner over one created in a factory.

I can also understand someone preferring a stone crafted to exacting technical standards over one randomly found in nature.

They're just different ways of looking at the world, and that's okay. Me? I kind of like the romance of a stone which formed before the first man climbed down from the trees, but I don't begrudge anyone his scientific marvel either.

>> I kind of like the romance of a stone which formed before the first man climbed down from the trees, but I don't begrudge anyone his scientific marvel either.

There's a lot of those out there that cost basically nothing and are not unethically mined, however. So, why diamonds?

> So, why diamonds?

Diamonds are generally a 'good' engagement ring feature from the chemistry/physics stand-point:

Pearls will melt in a variety of acids like vinegar, along with many other 'organic' materials.

Some stones also have strange chemical interactions and can change color or will patina with age (Fluoric acid, water from hot-springs, etc).

Some stones are 'soft' and will scratch over time as they wear and may need to be replaced (Rhodo, peridot, etc)

Some stones can build up internal stresses as they age and will become brittle (highly unlikely though, though possible)

The index of refraction of many stones does not produce as large of a 'sparkle' that diamond does (though others like zircons will be much more 'sparklely')

Generally, diamonds are relatively inert chemically and very very hard to scratch or damage, all while having a good enough 'sparkle' and are able to be found in large quantities. Though their prices are currently absurd, they are a good choice from a materials standpoint.

Diamonds burn.

At 900° C, or about 20% of the temperature of the surface of the sun. I actually thought it would be higher!

They will also theoretically degrade back to graphite over time, the way ice degrades to water at room temperature.

https://commons.m.wikimedia.org/wiki/File:Carbon_basic_phase...

Low enough to be burned in a house fire.

If that was the only point of distinction, I'd be right there with you. But the fact that natural diamonds are quite likely to have been mined using what amounts to brutal slave labor (even the ones that are "certified ethical," because these people have no qualms about subverting the certification process) is a pretty big issue for me.

I'm still blown away people want a shiny piece of dirt on their finger at all.

I too fail to comprehend why carbon crystals cause humans to secrete pleasure transmitters. I only secrete pleasure transmitters when solving abstract coding problems, and contemplating the agreeable weather up here on my elongated equestrian pedestal.

Jonathan is that you? [1]

[1] https://www.theonion.com/area-man-constantly-mentioning-he-d...

That's the power of advertising!

You can do it with anything. Spend enough on advertising, and you can get people to hand over $100+ for a pair of sunglasses that cost $5.85 to manufacture.

Maybe you are immune, sitting up there on your elevated equus.

There was a exhibit a few months ago. I am haunted by the Mirror of Paradise. Only a carbon crystal... ;-D

https://www.gia.edu/gia-news-research/mughal-jewels-auction-...

I'm amazed at how many people apparently can't see the obvious humor in your response. They must be the same people who think the onion is a real new source.

It is pretty dirt.

I'd guess that kind of thinking is reasonably common - anecdotally, my girlfriend and I are both in our early 20s and have been dating long enough that we've started discussing marriage. In one of our earlier discussions about it, I told her she shouldn't expect a mined diamond, because I'm morally opposed to the business and mining practices employed by diamond companies. She added the possibility of getting a recycled gemstone (which I didn't know about before!), agreeing that she wouldn't want a newly-mined stone.

I'm sure there have been attempts, but I've always wanted to create a startup that really directly goes after the "vintage diamond" market.

Diamonds and engagement rings in general have a really low resale value (despite being sold as an investment). This should create a market where you can buy low and then sell at a substantial mark up that is still _less_ than what's charged by the cartel.

Contact me on LinkedIn if you are seriously interested in pursuing something like this :)

We, at Liquid Diamonds, are building an online exchange for naturally mined diamonds; think Nasdaq for diamonds. https://liquid.diamonds/

There are a few person to person markets that work pretty well, like diamondbistro and idonowidont.

That won’t work. The reason they have a low resale value is because the retail markets have a 100% markup. So, immediately after buying the diamond you cut its value in half. So you’re proposing buying diamonds at this price (wholesale price) and then selling them at a big mark up - who are you selling to??? Why would anyone buy a diamond from you instead of Zales? You can say “because mine are cheaper”, but how are you marketing? You may have noticed, those jewelry retailers have quite a marketing budget.

* there is no diamond cartel, this myth needs to die. DeBeers isn’t even the top diamond producer by volume any more

Significantly more than 100% last I checked if you don’t buy wholesale. I went to Bloomingdales 7 years ago and they had “50% off” diamonds and the markup after that discount was still roughly 500% considering the very poor quality of the gemstones. People really get ripped off unless they do proper research. Even Tiffany’s was 2-3x markup, although at least I will say they only had high quality diamonds so that’s a point in their favor.

I had initially intended on getting a synthetic sapphire for my wife as an engagement ring; but the thing is, I couldn't really find an easy way to get an artificial sapphire -- or any sapphire really -- which I knew was good quality, in a good setting. Diamonds have an entire system around rating every aspect of them: the clarity, the cut, even the fluorescence. In the end, I figured knowing exactly what I was going to get trumped paying for something of whose idea I had no quality. (I bought one with extra high flourescence, and a hand-held blacklight to test it.)

>> Diamonds have an entire system around rating every aspect of them: the clarity, the cut, even the fluorescence.

I know where you're going with this and agree to some extent, but this ratings system is entirely fraudulent and propagates the myth that there is some secondary market for gems that backs the value of the jewelry - when there absolutely is not. Ask any pawn store broker.

The rating system is not at all fraudulent if done by one of the three biggest labs: GIA, AGSL, and IGI.

The appraisal system is often massively overinflated, however.

You won't receive anywhere close to what you paid for, much less the the overly inflated appraisal that you got, on the secondary market. Rule of thumb is maybe 30% or less if you bought it from a mall store. But there is a thriving second hand market.

I knew that there was no secondary market for diamonds. The only place I'm "going" is that I knew what I was going to get.

I would gladly have paid the same price for an artificial sapphire in a platinum setting, with similar certifications. But first of all, I couldn't find anywhere that would sell me artificial sapphires in a precious metal setting. Secondly, I couldn't find anywhere that even described with some level of accuracy anything about the sapphires (artificial or not)-- exactly what color? Exactly what size / cut? Exactly what level of clarity? Just fuzzy descriptions about how beautiful the stone is. Sorry, not going to drop $1000 on your assertion that this blue rock is "gorgeous".

The certification said the stone was X size, Y clarity, Z color, and had a really high fluorescence; and what I got was a stone of X size, Y clarity, Z color, and a high fluorescence. It may be a racket, but it's a well-oiled one.

There absolutely is a reason for these “ratings” (characteristics is a better term). They separate our differenr stones that let buyers know what they’re buying. When you’re spending $100M on rough stones, you want to know what you’re buying. As an anecdote, the prized characteristics are different in the world. In the US size matters. In Japan, clarity matters. In a China, color matters.

As someone in my early 30s I'd never buy a diamond, or any precious resource really. Why spend a ton of money to tear up the environment or fuel conflicts, only to get something shiny? It seems like a terrible waste to me.

If your partner is aligned with that then ok; otherwise good luck!

She is. We got a Swarovski glass ring. Cost $120. Look at all the debt I don't have because I didn't spring for paying an additional few thousand on optimal status signaling.

Good work - I'm not sure how my wife would have taken such a suggestion. Our whole friend group owns diamond engagement rings. The social pressure is still very real and that somehow seeps into the minds of even the smartest women I know.

My fiancee told everyone it's a diamond.

Which actually annoys me, because if I'm being honest, I think people who go into debt for meaningless baubles are being foolish. I think our whole consumerist culture is foolish. Save your money, do what you want.

I guess my fiancee knows she's with a man who would never spend thousands of dollars on a shiny rock.

She clearly felt the social pressure then too.

As a married millennial, my wife and I both were against buying any "new" mined diamonds. Her engagement ring was actually a vintage ring and the wedding band had "lab" diamonds inlaid. Thinking back at our friends who married, many that decided to bought new diamond jewelry made it a point to mention the diamonds were "ethically sourced" in one form of another. Two other trends I've noticed: diamonds seem to be both less popular on engagement rings and smaller when they do make an appearance. "Large" diamonds seem gauche.

Question: Why would I spend a pretty penny on a lab grown diamond where the prices are a race to the bottom.

Yes, I do agree that I'd probably lose 20 cents on my dollar as soon as I buy the diamond even if I did my homework and bought it at a good price. But at least there is a resale value of the stone since unlike lab grown diamonds, there isn't an unlimited supply of mined diamonds: https://www.bain.com/contentassets/7b9f04068ca64542a17b71713...

Disclaimer: At Liquid Diamonds, we are building an online exchange for naturally mined diamonds; think Nasdaq for diamonds.

Synthetic stones are still quite expensive. Natural alternatives are interestingly cheaper.

The term you use, “a synthetic stone”, is odd considering it actually is a diamond.

I mean, if the gold in the ring was not mined from the earth, but instead extracted from seawater (it’s a thing), would you call that not “gold”, but “a synthetic metal”?

What about if the gold was from recycled computers?

"Synthetic stone" is another bit of marketing the diamond cartels have come up with to combat the fact that they're losing market share from artificial scarcity - imply that the man-made diamonds are somehow inferior to natural stones.

A few years ago I read the diamond lobbyists were trying to require "synthetic" diamonds to have some sort of microscopic etching inside. Apparently the technology is getting so good even skilled diamond appraisers aren't able to tell the difference.

They can tell the difference because the manufactured ones, especially those produced by the vapour deposit process, are too flawless to be natural :)

I've also read that the flawless manufacturers are now introducing imperfections to combat just this!

Synthetic in terms of the definition "produced artificially", that is, in a lab. Non-synthetic would be one produced naturally (most likely many miles under the earth's surface). It's the method of production, not the chemical properties, the distinguish synthetic from non-synthetic.

Most of the lab processes are at least structurally similar to that "natural" process: at the end of the day it is just ways of pressuring Carbon into a grid. Maybe a better analogy is that we don't (currently, at least) make a distinction between "natural" foods and "greenhouse/hydroponically grown".

We have plenty of people complaining that foods should be labeled GMO or non-GMO, which is the exact same debate. Except dumber, actually.

Not exactly. GMO foods are genetically different by definition. Whether or not the difference is significant is another question, but natural vs "synthetic" diamond really is closer to the question of where a plant is grown, or perhaps if it's wild vs. planted.

So it's more like the Champagne versus Sparkling Wine situation.

Right, it's only a Diamond if it's from the bloody regions of European colonialism, otherwise it is just Sparkling Carbon.

> It's the method of production, not the chemical properties, the distinguish synthetic from non-synthetic.

So i give you two stones. Can you tell me which one is synthetic? It's a marketing term only. We don't call the gold used in the ring as man-made, but it is certainly blended by man with other elements.

No, but what does that matter? It mainly comes down to cost. If you give me 2 diamonds that are absolutely equivalent in terms of size, clarity, etc. and tell me that one costs $6000 and the other $600 then I can tell you which one is natural and which one is synthetic. I want the $600 synthetic one.

If there is a gold cartel to enforce it, yes.

For a humorous example see the origin of "processed cheese".

Cheese is a bad comparison, since cheese is different from what “processed cheese” contains. But gold is gold, and diamond is diamond – i.e. elemental particles in a regular structure.

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