If you were to contact most of the diamond manufacturers, dealers, wholesalers and retailers around the world and ask them how a rough diamond gemologist or cutter evaluates rough diamonds, they would undoubtedly tell you it is based on yield. If you asked them about Adtec pricing, you would be faced with blank stares. The reason for this is that few diamond people have heard of Adtec and even less have ever seen or used the list.
In the diamond world of the internet, banks, rough diamond investors, hedge funds and others, the buyers rely upon Adtec as a basis of pricing and negotiation. Most of these people do not intend to manufacture (cut) polished diamonds from the rough they purchase. Rather, they will either stock it away in a vault, or use it as collateral, or monetize the asset.
For these people, Adtec makes sense and makes their job of evaluation, monetization, and mobilization easier. The banks and investment companies like to refer to Adtec because it gives them a sense of security for monetization or in determining just how much cash they should loan against their asset of rough diamonds.
In a way, it makes a lot of sense to use Adtec, unless of course you wish to dispose of the diamonds in the future, or you wish to know the real market value. Did I just see some eyebrows rise? Yes, it is true you will probably have some who will purchase the rough diamonds from you in the future using your manifest and current Adtec to determine value. This of course is fine if you happen upon this kind of buyer or you never plan to sell. However, for those of you who want the option of an exit, the question I would ask is, why a smart guy like you would limit your options in your exit strategy?
What happens to your exit plans if the unforeseen happens and the value of your rough diamond investment declines? What do you do if many people wish to exit at the same time as you? For people like me, these are not large concerns. I am connected in the real diamond world of manufacturers, dealers, and wholesalers. I also do not use Adtec to determine value. I use yield and because I know what a piece of rough will weigh and be worth after polishing, I know the value can drop 35% and I will still be able to come out without a loss.
Many of you will doubt my last statement. No problem, I base my statement on experience and in the knowledge of how to maximize the value of my purchases. I wonder what criteria you are using to base your doubt. For all of you who use Adtec I wish you well. For those who know the real market value of the goods they own, I say well done.
If you are buying rough diamonds and you do not know the real value of your goods, then hire a rough diamond gemologist who does.
Louis Pearl G.G.
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