Economies of Rarity

When operating in Economies of Rarity, supply and demand ultimately determines value...

Imagine...natural fancy colored diamonds were formed billions of years ago and only recently have come to the earth’s surface for the world to see. In fact, not so long ago, they were discarded as geological oddities. Today, natural fancy colored diamonds are considered the most concentrated form of wealth on the planet.

For every 10,000 carats of colorless diamonds mined, only one carat of colored diamond is found. Natural fancy colored diamonds account for 1% of all diamonds mined today. Pink diamonds sold at the Argyle Pink Tender are literally one-in-a-million of the total production from the Argyle Diamond Mine in Australia. Many natural fancy colored diamonds are so rare that their market value can only be determined through a bidding process, as occurs with fine art and antiques.

Economies of Rarity is a term coined by Rare Investment referring to a market condition created by high demand for a rare commodity that has low to no supply. The diminishing supply of natural fancy colored diamonds is a structural market condition which cannot be altered in the foreseeable future. Like all rare art, antiquities, and other rare commodities, returns on natural fancy colored diamonds tend to be the highest in comparison to traditional investments.

The Opportunity

Rare Investment is currently bullish on Champagne diamonds. It’s not a secret that more money can be made by ‘buying low and selling high,’ opposed to ‘buying high and selling higher.’ The key is to buy a hot, hard asset that’s in demand just before everyone else is doing it. Champagne diamonds are currently the only colored diamond still priced below colorless (white) diamonds. But they won’t be for long...

The Champagne diamond market has literally gone from zero to a 5 billion dollar industry. The world’s largest supplier of Champagne diamonds (and Pink diamonds) is scheduled for closure in 2018. Follow the link to see the Argyle Mine’s closure strategy. Never in the history of recorded time have Champagne diamonds been poised to appreciate more...and they are currently affordable...

The Global Diamond Market

Currently, worldwide demand for diamonds has never been stronger. KPMG foresees a growth of total revenues from 185 billion USD in 2010 to 230 billion USD in 2015. All of the major diamond retailers such as Harry Winston, DeBeers, Tiffany’s and Laurence Graff have opened up flagships in Asia to anticipate China’s booming economy. The Indian and Chinese market for gems is predicted to have surpassed the U.S. market in size by 2015.