interview facto zero volatility, suggesting a high price stability. In periods of economic, political or other instability, diamonds historically behave as a counterbalance compared to other types of assets that are subject to price declines and price increases. If you look at it in numbers, the long-term average return on so-called Investment Diamonds is between 6-18% pa. Of course there are diamonds that appreciate differently, but this is dependent on the parameters of each stone, and it depends more on the choice. If we focus on a specific case over the past ten years, then e.g. stone weighing 1ct / D / IF for 10 years increased in value by 63%. Today it is an investment of just under 27.000 USD. If we look to a higher class of stones, then a diamond weighing 5CT / F / VVS2 has for the last ten years seen an increase of 184%. We are talking about a diamond at the current price of 365.000 USD. We could also choose other examples. How about the authenticity of diamonds? Has a layman any chance to distinguish whether it is a real diamond or a fake? Yes, this is an important issue. I must say that the layman has no chance to discover whether it is a real diamond or other material. On the market, especially in jewelery, there are stones which are very similar to diamonds and are thus presented. It is very encouraging that Czech Trade Inspection has become interested in this issue, and is trying to ensure respectability at the retail market. For each customer it is very important to know from whom they buy. In recent years many online offers for diamonds have appeared, and also offers for free investment stones. Here, the customer must be especially vigilant. Because of my own experience I know that many things are different than presented on commercial sites. Likewise, each customer should pay attention to the so-called merchants who offer „guaranteed quality and genuine diamonds directly from Africa at very competitive prices.“ I had the opportunity to consider several offers like that, and it has always been a buyers trap. Anyone interested in jewels has the right to require a certificate from a merchant issued by an independent gemological laboratory. Better yet, attached to the jewels are so-called Reports which list all the technical characteristics of the materials the jewel is made of. Any person interested in investment diamonds should require a certificate, issued by an independent gemological laboratory recognised worldwide. Our company cooperates with the world‘s most renowned laboratories (GIA, IGI, HRD), which use a common evaluation system established by norm ISO / FDIS 11211-1. In connection with security features such as security packaging, laser stone marking, and any certificate verification from a laboratory, each client has absolute assurance of a stone‘s authenticity. You have mentioned that the diamond has unique properties compared to other types of assets. What characteristics are they? Besides their conservative nature, and thus a stable price, it is also their complete focus of value into such
IN COOPERATION WITH LEADERS MAGAZINE
What price development can we expect in the diamond industry in the future? Given the world´s very limited resources of diamond-bearing raw materials, and the rising costs of their extraction, it is not possible to assume that diamonds will be cheaper in the future. The latest detailed analysis at the end of 2013, which can be found in the client section on my website (www.milansedlacek.com), describes future development in detail. Currently, worldwide annually increasing demand for diamonds (about 5%) is balanced by increased production of the mining sector. In 2018 the world should realise four new mining projects. The subsequent period will be characterised by a gradual decline in production (by about 1.6% per year) due to the gradual closure of existing mines because of their extinction. As a result, a widening gap can be expected between growing demand and restriction of the raw materials available on the market, which will have a big impact on the price of diamonds, as is expected by all experts in the industry. That is one point of view. The second one incorporates an unclear view of the further development of the functioning monetary system. While the diamond (besides gold) again became an alternative form for the preservation of property values, it can be expected to have growing importance in the financial world. Some financial houses have already started to focus on this, and the diamond is expanding its scope to approximately 3/5 of the world, where the role of investment instruments has thus far not worked, or was in the past interrupted. And this is an important aspect that will determine the growth of prices in the future.
a small piece of matter. There is a difference of storing 80 kg of gold compared to one stone weighing 0.6 grams. Another important feature is the high mobility and the free transferability from one country to another. Just look at the story of Jan Antonín Baťa, where he mentions how they transferred their capital abroad to begin to build their business in another country. Then there is also the worldwide possibility of liquidity, according to the globally valid price list, which just confirms the diamond‘s nature as international tender. And we must not forget its discrete nature. A diamond is not a registered commodity anywhere in the world, and cannot be traced back to its owner. So if we are talking about a strategy of building a property portfolio of different types of investments, then the diamond has an absolutely irreplaceable role and importance. Therefore it can be considered a part of the financial life of every successful man.
What direction will DIC take in the upcoming period? First of all, we agree with the context described in the previous answer, and have taken necessary steps to ensure that our company will be a major player in this field. Our foundation is built on our nine-year history in the market with clearly defined results. I can not describe our plans for the company, which we are preparing for the future. I can only say that the plans are really big. Maybe you saw in the media a few weeks ago that for the next ten years DIC will be the general partner in organising the Miss Universe worldwide competition. It‘s a huge success story that this Czech company received this prestigious project. It‘s also a huge responsibility and an obligation to prove to the world that we are among the world‘s elite in our industry. However, this is only the first bit of the future mosaic. At this time, the company‘s management is working hard to create the conditions for the planned expansion of business activities. Management is creating the background for planned growth of business production and related activities. I am sure that the future will bring many new things and will strengthen the significance of our company, not only in the national branch but also on a global scale. We have really great challenges and a lot of interesting work in front of us. Prepared by LM ■ české znění naleznete na našich stránkách www.leadersmagazine.cz
Leaders Magazine IV/2014 35