Friday, November 23, 2007

What is the value of the largest diamond ever found in the world?

I discovered my calling by happenstance. In the summer of 1970, I was standing on a street corner in London with a few days to kill before returning to college in the Midwest.

Some kid walked up and asked me if I was an American too, and what should we do today. I had no idea. He said let’s go see the Tower of London and the Crown Jewels.

No argument from me. I was clueless that it would make such an impact on me. I think the Tower was free, but I’m sure we had to pay and queue to see the jewels. Turns out we saved the best for last.

First we saw creepy cold dungeons, miles of armaments and chain mail, then gold and silver beyond belief. A few hours of history lessons later, three stories underground in a huge cylindrical vault, pie-sectioned behind glass, there they were.

No pictures were allowed. And, you had to keep moving. If you wanted to stand and gawk you could only do so from about 4 feet away over the heads of passersby. Or, you could pass by once more and then, bye-bye.

I recall being totally wowed. The Cullinan I blasted huge rainbows on all of us, shining beams of colored light up to the ceiling. It was cut from the biggest rough diamond crystal ever found in the world.

They say it was the size of a grown mans fist. Over 3,000 carats in the rough, and its rumored that parts of it are yet unfound. A legendary diamond - from the best source in South Africa, cut by Joseph Asscher the world's most renowned cutter.

Even though the rough was cut into over a dozen gems, the Cullinan I remained as the world's biggest diamond. Its sister the Cullinan II was not much smaller. Today, both these Cullinan’s remain as the star attractions of Queen Elizabeth’s entire collection.

What do you suppose the Cullinan is worth?

The Cullinan was found in the ground in a mine. I’d guess that finding this size diamond was in nobody’s plans when they started that mine. After all, diamonds that size were completely unheard of.

The mine probably would've kept on going, even if they’d never found this diamond. So let’s just call this particular diamond’s cost zero – chalk it up to good fortune, blind luck, a push, a gimme.

Then it was given to the King. I don't know the details, but it’s a safe bet that the mining company got some kind of quid pro quo. Why trade something for nothing?

The King commissioned Asscher who reputedly received 15% of the total finished weight, in the form of the smallest diamonds – as his share in kind.

Then the jewels were painstakingly set by His Majesty’s jewelers with enumerable other precious gemstones - such as the infamous Black Prince Ruby - into the Queen’s crown and other accouterments.

I see a pattern. No money changes hands.
Nobody ever places a value on this thing. So what’s it all worth?

To me the Cullinan is absolutely one-of-a-kind, head-of-its-class, best-in-show, and beyond-the-pale. In the diamond world, it doesn’t get any bigger and better – physically or meta-physically.

If diamonds have any value at all, then the Cullinan I alone – a colorless, only slightly included diamond that weighs well over 500 carats – ought to be worth a freaking fortune. Its even shaped like a nest egg.

But, nobody is selling and nobody is buying.

Is it priceless or is it worthless?

Who could afford it anyhow?

If priced too high nobody will want to buy it. If the price goes any lower its an insult to the Throne.

If you had the Cullinan in your hand, what do you think you could get for it? Nothing. In fact, maybe less than nothing. Its history is set in the British Crown.

The value of it all still intrigues me.

Friday, November 16, 2007

Same As & Similar too?

What is the meaning and value of something "similar"?

When I think of valuable art, I always think of Picasso. He’s the most famous and prolific artist in my lifetime. He shares my birthday. And, he’s even interesting from a diamond cutter's point of view.

You see, Gabi Tolkowsky almost has me convinced that Pablo invented Cubism only after seeing the fabulous Cullinan's faceted worldview in his own minds eye.

In any case, Picasso made a fortune in his own lifetime. That’s almost unheard for an artist. Sure, Van Goghs go for millions today, but Vincent couldn’t afford the rent if you know what I mean.

Pablo on the other hand made plenty of dough and was a big celebrity, a living legend.

I actually saw him interviewed on a TV special about forgery, in particular art forgery. In fact, fake Picasso’s. It seems a certain big time museum owns a Picasso that a self-confessed art swindler swears is really a fake.

Big conundrum: Professional Experts versus Professional Thief. Who can you believe these days?

So they asked Picasso. And he said, “How would I know? I’ve made piles of art. It’s all over the world. Some of it is signed and some of it not. I can’t remember all of it”.

Then he added, “If it was sold as a Picasso and taken as the real deal, then that's what it is. Why interfere?”

I think its fair to say that the difference in value between “similar to” let alone “same as” were teetering on a very fine line in this case.

But, you know as well as I do that it would have been humungous!

Tuesday, November 6, 2007

Same Old Same Old - So and So...

What's the difference in value between a
One Dollar Bill and a $100 Bill?

Both of them are printed on the same weight paper of the same dimensions, using the same ink in the same colors that won't bleed, made at the same locations by the same people, who speak the same language, earn the same wages, and pay the same damn taxes.

Both bills are backed by the same government with Zero hard assets. The only discernible difference between the $1 bill and the $100 is two extra zeroes. You'd think they'd have absolutely the same value.
You'd be very wrong!

In fact, no matter what price the US Dollar may command in foreign capital markets, whether recklessly high or dangerously low, the $100 dollar bill is precisely 100X more valuable than a $1 bill!!!

You can take that to the bank!

But, WHY? They are exactly the same thing!!!

Sort of. While there doesn't seem to be any tangible difference between these same-in-every-material-way pieces of paper, there is indeed a vast difference in their use and value.

Some may say its all based on illusion, only attributable to massive self-delusion and major marketing efforts. But, I doubt its quite that simple.

I'd argue that it's because the US Dollar is an extremely successful Brand. There is great value in the fact that people agree on its power and integrity.

One thing I know is certain. Its guaranteed that if you collect the whole set you'll become a very rich person. Living a very satisfied life. And, its all based on TRUST. It says so in writing - right there on the back.

Last time I checked TRUST was just one of many non-quantifiable "emotional" values. Go figure.

So let me ask you this... what do you suppose is the real value of "similar to"?