A Moment With… Ehud Laniado, Chairman, Cora International, an Exclusive Interview

EHUD LANIADO

Ehud Laniado, seller of two of the four most expensive diamonds sold in the history of Sotheby’s, speaks to EAT LOVE SAVOR

What drew you to the diamond industry and continues to fuel your passion?

My passion for diamonds is multifaceted. Decades ago, I discovered my fascination for identifying the miniscule details which determine what a rough diamond can sell for once in its polished form. It was a skill I mastered with my own hands before the advent of any of the sophisticated mapping technologies used today. I built my way up in the industry, starting my career in the African bush buying diamonds on behalf of an Israeli company. I moved my family out to the Central African Republic in my early 20s for the job and I later moved to Antwerp where I lived for over 20 years.

Today, I’m equally as interested in nurturing the public’s perception of diamonds, particularly helping people understand the investment potential of diamonds, and what that will mean a decade from now. I hope that many people will enjoy and profit from diamonds in the future!

Of course at the heart of all this, is my fundamental love of diamonds as the ultimate treasure of nature – the tears of the gods, as the ancient Romans and Greeks called them.

I’m an avid reader and I stay abreast of all aspects of the industry from mining and trading to exploration – as well as the jewelry market. I publish articles on my personal website www.ehudlaniado.com twice a week with topics ranging from the diamond industry job titles you’ve never heard to the world’s top diamond producing regions.

What are some of the misconceptions about purchasing diamonds as an investment?

It’s easy to underestimate how rare diamonds actually are. Even a one carat D Flawless diamond is a rarity of nature. It takes nature millions of years to form a diamond. The depths of the planet are like an impenetrable safe that stores rough diamonds. The minute probability of nature slowly producing a diamond over millions of years, which may or may not rise to the Earth’s surface, which may or may not be discovered, which may or may not have a perfect colour, which may or may not be free of inclusions, is so tiny that these combined factors can, and does, propel the value of such rare stones skyward.

Also, it’s hard for members of the public to understand how to navigate the buying and selling process. This is why I have made aspects of the Mercury Diamond Price List available at no cost to the public – you can find a link to it on my Instagram bio at @ehudaryelaniado

It lists market prices for hundreds of different categories of diamond. I’d like to make sure that in the future when people buy a diamond, they’ll have as much information at their fingertips as they do when buying any other expensive item, like a car, a house or a rarefied watch. Of course, with that in mind, I always advise investors to involve a suitably qualified professional advisor in the decision making process for all important diamond investments.

The Chinese market has suffered in recent years but it is making a comeback. When prices for a rare item remain stable and relatively low over a period of time, there is potential for growth and profit and in my opinion this is the case now for diamonds.

What do you wish people knew about diamonds where investment is concerned?

Firstly, I’d like to see education about diamonds starting at elementary school level in science lessons. Children need to know that diamonds are creations from nature, formed over millions of years, then pushed to the surface by volcanic activity. Museums and auction houses are fountains of knowledge when it comes to how diamonds are formed, polished and sold.

As regards investment, the more that potential investors understand about how diamonds are priced, the better. This is why the Mercury Diamond pricing system which I created is founded on the value of transparency.

The positive societal impact of diamonds is enormous. An estimated five million people globally have access to healthcare thanks to revenues from diamonds. Diamonds have enabled every child in Botswana to receive free education up to age 13. An estimated 10 million people globally are directly or indirectly supported by the diamond industry, including one million in India. Approximately $8.5bn worth of diamonds a year come from African countries. In Canada, tribal communities located in regions where diamonds have been discovered, are flourishing, in many cases benefitting from access to food, housing, education, professional training and a far superior standard of living to members of other neighboring communities.

How did you come to develop the Mercury Diamond Price List™ ? What do you hope it achieves for the consumer and industry overall? How does it differ from other pricing lists available?

Most of the current subscription diamond pricing systems are designed for diamond industry insiders. The Mercury Diamond Price List is designed to be available to the public at no cost and is based, in the large majority, on actual transaction prices.

Our goal is to make diamond pricing transparent and accessible to the public. Underlying my pricing system, there are over 400 different reasons why diamonds might be discounted or bear a premium. The system is designed to explain in huge detail, why diamonds with a very similar description, might have a price differential of up to 40%.

– David Bennett, worldwide chairman of Sotheby’s International Jewelry Division, selling the Blue Moon of Josephine in Geneva in November 2015. Courtesy of Sotheby’s

What questions should an investor ask when assessing a diamond expert to consult with for their investment needs?

Diamond experts can help on the four issues that any investor in diamonds needs to be aware of. Firstly, a would-be investor needs to understand in depth, the quality of a diamond and the rationale behind its price, down to every last detail. Secondly, I would advise an investor to research the price performance of this exact quality of diamond in recent years. Thirdly, the diamond needs to come from an ethical source. And finally, I advise investors to buy diamonds at wholesale prices, avoiding unnecessary mark-ups.

What advice do you have for someone who has diamond jewelry they wish to dispose of, for example, diamonds 2 carats plus in size… what in your view is the best way to prepare for and to go about selling in order to get the most they can for their investment? What are the realities of selling estate pieces of diamond jewelry?

Apart from selling via an auction house, there are some retailers who buy back jewelry, which is a helpful option for individuals who wish to dispose of jewelry while upgrading to something of a higher quality and value. Some even guarantee their customers that they will buy back or exchange diamonds and diamond jewelry for its market value whenever a customer wishes to sell. There are also a few companies online who now offer customers the option of selling diamond jewelry online to the highest bidder. Personally, I welcome any ventures that give the consumer more options.

When selling estate diamond jewelry, it is advisable before finding a buyer, to visit a trusted third party who can value the jewelry, because in some cases, people can underestimate the true value of the family heirloom they have in their possession.

Most are familiar with the 4 C’s of diamonds, but you cite a 5th. (Commentary – including commentary and inclusions) Why did you feel it was necessary to add this and what valuable information does it provide the investor?

The reason the Mercury Diamond Price List is revolutionary is that it explains the price differentials that sometimes exist between two diamonds which, when considering their colour and clarity alone, appear to be of exactly the same quality.

A list of hundreds of possible comments and irregularities, found on a diamond certificate, are crucial to determining the price of a diamond. We’ve developed a proprietary list of more than 400 of them. Some minor comments do not impact the price of a diamond but others do – for example, internal graining which refers to thick white or brownish lines on the stone, or a cloud, which is a cluster of small inclusions invisible to the naked eye that combines to create a cloud effect. The Comments section can describe a cloud as small, large or hazy. While a small cloud hardly blocks any light and may not impact the price, a large cloud could result in reducing the brilliance of the stone and also the price. Or strong fluorescence on a stone could bring down its price by up to 40%, while faint flourescence could bring it down by 10%.

About the jewelry pictured:

  • Blue Moon of Josephine, a 12.03 carat flawless fancy vivid blue diamond, sold in November 2015 at Sotheby’s Geneva for $48.5m, which retains the world record for the highest price paid per carat for any diamond at auction ($4.1m)
  • Unique Pink, a 15.38 pear-shaped fancy vivid pink diamond, sold in May 2016 at Sotheby’s Geneva for $31.5m, the highest price ever paid for a fancy vivid pink diamond at auction