At this time, a boy in the audience raised his hand, and Hu Yiming gestured to hand him the microphone.

The boy asked: "Mr. Hu, according to what you say, the men who buy diamonds are all stupid? ”

Hu Yiming laughed out loud and praised: "Okay, you asked a very good question." However, your question just leads to another high level of hype, that is, even if others know all your routines, they can still only pay honestly. ”

"Let me tell you a joke, two men and women who are highly educated and know the story of diamonds. The man told his girlfriend that it was not worth buying diamonds and that he was stupid, and then his girlfriend replied, "Can't you be a fool for me?"

In short, when the idea that diamonds are the best surprise for women is accepted by everyone, everyone's, whether men or women, are kidnapped by this hype.

Later, diamonds became such a formula in people's minds:

About 84% of the men surveyed believe that women want diamond jewelry.

The process of giving a diamond as a gift is divided into 2 steps: 1) the man "learns" from the woman that it is OK to give a diamond, and 2) at some point later, he makes the decision to buy a diamond to surprise the woman.

After talking about the surprise, Hu Yiming began to tell the next story.

Hu Yiming said: "Do you know what kind of hype was formed under the concept that diamonds cannot be sold?"

With the exception of a very small percentage of diamonds that have deteriorated over time, every diamond in the world that has been processed and set in jewelry exists. Hundreds of millions of women wear diamond jewelry, or are collected and preserved. Conservative estimates put the total at 500 million carats, and the highest annual production of diamond cartels did not exceed 10 million carats.

In order to keep the newly produced diamonds still sold, it is necessary to consider how to prevent the large number of existing diamonds from flowing into the market. De Beers began to think about a strategy to get diamonds into the hands of people who believed that the value of owning diamonds was much higher than the market price, especially women who were psychologically resistant to the idea of selling their diamonds.

In addition, those who have diamonds do not necessarily have feelings for these things, such as those obtained by inheritance, and they must be persuaded that the diamonds can retain their value. If they see price fluctuations in the diamond market and try to sell them when prices are rising, there will be chaos in the retail market.

So De Beers always tries to make the price stable, or at least look stable.

In his 1971 annual report, Oppenheimer explained the unique position of diamonds: a certain degree of control of the market is a prerequisite for the healthy development of the industry, not because of overproduction or declining demand, and if the price fluctuates sharply with supply and demand, as is the case with other commodity raw materials, it will destroy the public image of diamonds as a pure luxury item, and it is because of this that a large number of diamond jewelry is owned by the public.

When diamond mines produce more than they demand, cartels either reduce supplies at the London Trade Fair (10 times a year) or buy back at the wholesaler level to maintain the illusion of price stability. The assumption behind it is that as long as the public doesn't see the price of diamonds falling, they won't get nervous and start selling diamonds. If a huge stock appeared on the market, neither De Beers nor this cartel could accept a collapse in the price of diamonds.

After a pause, Hu Yiming said: "De Beers controls the number of diamonds so that the price will not plummet, but can diamonds really retain their value?"

It is difficult to make a profit by reselling diamonds, even after holding them for a long time. This kind of attempt was first made in the 70s, and it was documented.

In 1970, for example, a consumer goods magazine in London decided to conduct an experiment to see if diamonds could be used as a 10-year investment. Then I bought 2 gem-quality diamonds from the most famous jeweler in London, each 0.5 carats, 400 pounds. The diamond was sealed in an envelope and kept in a safe for approximately 9 years.

During this time, the UK has experienced high inflation of 25% per year. If the diamond retains its value, it should have increased its value at least 3 times. But when they tried to sell the diamond in 1978, they couldn't find a company willing to pay that price. Most jewellery houses refused to buy cash in cash and instead exchanged them for new diamonds.

In the end, the magazine sold it at the highest bid of 500 pounds, and in eight years it made an extra 100 pounds, with an average annual compound interest of less than 3 per cent, and only 167 pounds after adjusting for inflation in 1970. The crux of the problem is that the buyer, not the seller, is determining the second-hand market price.

Speaking of which, Hu Yiming concluded: "On the surface, diamonds can maintain their value because the price will not fall. But in fact, when you want to sell the diamond, you can't find the right person to take over! Therefore, the diamond is magically realized, and the price does not fall, and the diamond seems to maintain its value, but there is no decent second-hand market. ”

The magazine also tested whether larger diamonds could appreciate in value in a short period of time. In 1970, he spent £745 on a 1.42 carat diamond. In 1971, he went out to inquire about the highest price, and some people were willing to pay 568 pounds. In order not to lose money, I had to cover it until 1974, and then went out to find a jewelry store to appraise the valuation, and after going around, I found that the diamond had mysteriously shrunk, only 1.04 carats.

Hu Yiming said: "Obviously, this stupid magazine was dropped when one of the jewelry stores was appraised. ”

Hearing this, laughter rang out from the audience.

Hu Yiming continued:

At this time, the magazine was very brave enough to buy another 1.4 carat diamond and paid 2,595 pounds. A week later it was decided to sell, and the highest offer was £1,000. A similar record was followed by the Dutch Consumer Association, which bought more than 1 carat of gem-quality diamonds in Amsterdam for eight months, then asked the 20 largest jewelers in Amsterdam, 19 of them rejected the offer, and the last one was only willing to pay a fraction of the price.

From the point of view of the jewelry house, especially the famous ones, they usually don't buy back diamonds from customers, because if you really want to quote them, it will be ridiculously low. Because the buyback is calculated according to the wholesale price. The purpose of not making an offer is not only to avoid humiliating the customer, but also to avoid detracting from the public impression that the diamond appreciates in value.

Jewelry houses usually get diamonds from wholesalers on consignment and don't have to pay at all before they sell them, so they don't risk spending their money to buy diamonds from their customers, and usually advise their customers to go to a place that specializes in buying diamonds. In New York, the most famous is the Imperial Diamond Company, on the 66th floor of the Empire State Building. The front desk of the company is like a doctor's clinic, and you can always see many old ladies sitting nervously in plastic chairs waiting for their names to be called. One by one, go into the appraiser's small room to inspect their diamonds and listen to quotes.