That burning sensation is because you own it. (You’ll be okay. You’re still a one percenter)
In 2002, not long after starting work in offices with selections of large and rare diamonds I learned the category that topped them all…….the “It exists but we don’t talk about it” diamond.
Although you are literally 20 feet away from this type of diamond 8 hours each day, no one offers to share the details. However…. if you pick up the information trail and start asking questions generally you’ll be granted the facts. That is not the same as “license to share”.
The message is understood. These are VERY. IMPORTANT. DIAMONDS. Do not burn them.***
For perspective, my offices are best described as family-held “Banks” of larger diamonds. Each aggregates a major collection for the purpose of selling, but most of the activity is short term lending of a diamond to a retailer or dealer to show a client. If the diamond doesn’t sell, it comes back to the “Bank”. You’ve heard this process referred to as “memo”. On a regular basis I send out details on potentially appropriate diamonds that are generally one to twenty carats. It used to be more laborious. With the advent of email services, the ability to create awareness far and fast is unprecedented. Where it gets tetchy, and I have run up against the possibility of blowback, is in the instance where I “broadly” communicate a diamond that has crossed the threshold into the realm of “need to know” only. (This is fortunately just shy of “Now I have to kill you”).
Materially damaging the full sale potential of an important diamond is referred to in the trade as “burning” a diamond. As my workplaces are small and unusual, there is no corporate handbook for “what, when, how”. Being chastised for “potentially” burning a diamond is as close as I’ve come to trouble. Fortunately, in the few instances where I have been deemed “a touch too loose” with privileged information, the details did not go viral. But it’s been a good number of years and in the duration a new phenomena has developed. The burning of an “STD”.
An STD is how we’re referring to a “Socially Transmitted Diamond”. A diamond which spreads like a virus into the mass consciousness of second and third tier diamond dealers and merchants with a dollar value so sexy that if they could “just get a piece of it” (i.e. commission for finding a buyer) , life would be sweet and they would be instantly a “much bigger fish”.
There are diamonds that can shine up your reputation like that. The paradox is that once a diamond is “commonly” known, that window to be a “player” is OVER. When you find such a diamond on LinkedIn or Facebook (or at happy hour), it’s OFFICIALLY an STD. Whomever owns the diamond when the virus spreads is likely to be out of luck. The value is there, but the opportunity to realize a healthy return on investment has been “burned”. All of this because too many people who don’t really know each other all that well tried to get intimate with something that was not really their business.
In a nutshell the two most salient reasons a diamond gets “burned” are also somewhat esoteric.
1) Enough potential owners for an important investment diamond are so private about their wealth, that they will not present themselves as potential buyers for a ‘known” diamond. Fewer offers = weaker sales result.
2) A diamond that is broadly available for an extended period of time is neither exclusive, nor an exciting prospect. New + exclusive = stronger sales result.
It has taken me years to properly intellectualize the concept of a burned diamond after a variety of first hand experiences. Fortunately most New York City diamond “Banks” have measures for tightening control. While an important diamond may suffer unwanted exposure as a by-product of legitimate communications, the situation usually becomes contained. The crazy story always goes something like this…
(Important Diamond “Bank”) Owner: “I got an phone call from someone named “(redacted)” in Asia… offering to sell me the 22 carat (very rare color/quality diamond). He just emailed me the picture AND the (GIA) certificate. Can you believe this (manure)?”. Owner is laughing that laugh where the smile does not reach the eyes as the diamond offered to him is a diamond he already owns (and is usually in a vault right next to his desk). “He’s offering to sell me my OWN diamond .” “Asia Albert” is summarily informed that he has no right to represent the diamond and to pass that information back along the channel that led to this faux pas.
How do you know when a diamond has been well and truly burned? Let me recount a few first hand experiences that have come to me because of my situation….
I’m having drinks with friends at the Four Seasons and their jovial acquaintance from London (he in venture capital funds-raising) shows me an “$8 million dollar diamond” on his smart phone. His own acquaintances would love for him to locate a buyer. It’s all pretty casual, but he’s in the middle of this dance because they know that he rubs elbows with investors and they’d like to fish in his pond. He’s been offered a commission for his effort and so is seeking a buyer for $8.5 to 9 million. Back in the office I’m quickly informed that this diamond has been around the block many times for 5 million and is likely to be available for that price for a long time to come. It is deemed “not interesting”. It has been burned. By the time the diamond is casually discussed at any cocktail hour anywhere there are always many degrees of separation, hands in the till, etc. Actually producing the diamond for inspection is unlikely because these intermediaries do not really even know each other well. A deal has virtually zero chance.
I’m in the office in front of my computer. My true blue, brilliant fashion executive friend who is breaking into the “art world” (as is his wont) emails me that he has run into an art dealer who has a client who has a diamond to sell. Perhaps my fashion exec friend can find a buyer? Again…researching the diamond (read: one phone call), reveals that my friend is among the last of a long chain of individuals who, with no diamond experience, has been approached to find a buyer (great commission !) because the art world, which he has just recently entered, has wealthy collectors. I express my concerns, but only get back to him that the diamond is commonly “known”.
I’m meeting my girlfriend for drinks and a bite. She is intelligent and diversified. She knows jewelry in general, but is putting together energy deals because that is her focus. Someone in London, another deal-maker, has a very important diamond to sell. Can she find a potential buyer? She has the papers for me….
You get the picture…..all of these are diamonds that have been burned. In these cases the burning was person-to-person in a network of acquaintances. Nothing ever comes of it. The people doing real, actionable (and advisable) deals are those that represent their owned collection of important diamonds with perhaps ONE authorized intermediary in the sale. By the time someone shows me a diamond over a cocktail, it has been broadcast around the world multiple times. All I have to do is ask a bona fide owner of important diamonds. The answer never varies. He has been offered every important diamond that has come onto the market and usually has been offered first.
Today, you may see random, tangentially related individuals, not over cocktails, but on LinkedIn and other social media e-waiving an unusual large diamond picture and a grading certificate hoping for bites. The diamond is an STD. There is no upside. Only a history of burning.
***(Note: If a diamond is qualitatively among a number of other, fairly comparable diamonds in the marketplace, it’s not considered a burnable diamond and details are generally accessible.)