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Egl- Universal Gemological Services


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#1 chucklehut

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Posted 18 April 2008 - 12:07 PM

Hi there,

I realize that these retail EGL/UGS appraisals are inflated, but I am trying to get an idea of how much they are inflated.

The following stone has a "UGS" appraisal of $15,680.00 What would be the "real" retail price that I could expect to pay out the door? And are there any problems with this stone? Many, Many thanks for your advice:

Weight: 1.51c
Measures: 7.41mm x 6.02mm x 4.08mm.
Table: 59%
Depth: 67.8% total depth
Faceted girdle (thin to thick) with no culet
Polish - Good
Symmetry - Good
VS2 Clarity
H Color
No Flourescence

Does this appear to be a pretty, clear stone with lots of fire, and what would be a reasonable price on the low and high end?

Kudos for your assistance!!!

#2 denverappraiser

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Posted 18 April 2008 - 12:43 PM

The database here lists some EGL graded stones and you can compare prices fairly easily. Click on the ‘find online jeweler’ link at the top of the page and you can find offers for similar stones from some other dealers.

The key question that jumps to my mind is, since you’ve already determined that you don’t believe the contents of your ‘appraisal’, why do you still want to rely on it? For example, you are assuming the color and clarity are both facts but your source is the same as the value. You've already determined that you shouldn't trust them. So don't. This is a very dangerous assumption. Buy a stone graded by someone you have reason to believe. I recommend GIA and AGSL.

This document tells you almost nothing about the stone and what it tells you about the dealer who is using this as part of their sales pitch isn't good.

Neil

Edited by denverappraiser, 18 April 2008 - 04:16 PM.

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#3 chucklehut

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Posted 19 April 2008 - 06:58 AM

Thanks for your help!

Let's just say that the stone did check out, and that everything was accurate. What would then be an estimate of what I could expect to pay for the stone?

Weight: 1.51c
Measures: 7.41mm x 6.02mm x 4.08mm.
Table: 59%
Depth: 67.8% total depth
Faceted girdle (thin to thick) with no culet
Polish - Good
Symmetry - Good
VS2 Clarity
H Color
No Flourescence

Does this appear to be a pretty, clear stone with lots of fire, and what would be a reasonable price on the low and high end?

I really appreciate everyone's help!

#4 denverappraiser

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Posted 19 April 2008 - 09:52 AM

What shape is this? Assuming this is a princess cut that we're talking about, the cheapest EGL/1.51/H/VS2 listed in the database here is being offered for sale at retail for considerably less than a third of that price. The most expensive is still asking quite a bit under half. If you're ok with taking the weight up to , say, 1.55cts, there are dozens of stones available.

Neil

Edited by denverappraiser, 19 April 2008 - 02:58 PM.

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#5 diamondsbylauren

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Posted 19 April 2008 - 11:28 AM

Neil touched upon this, but whoever is offering this diamond needs to let you know the report is not accurate.
What it sound like you are doing is attmepting to base a judgement on a report those in the trade know to be unreliable.

Put it this way- if the diamond was an H/VS2, and well cut, NO dealer would send it anyplace other than GIA. That tells us a lot right there.

#6 denverappraiser

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Posted 19 April 2008 - 01:34 PM

Put it this way- if the diamond was an H/VS2, and well cut, NO dealer would send it anyplace other than GIA. That tells us a lot right there.


Not to spit hairs but AGSL is a reputable lab and many actually prefer it to GIA, especially when the stone is expected to score top marks on one of the the AGS cut grading scales (modern round brilliant, certain step cuts and most recently certain ovals). For these stones they are not only comparable to GIA, they are preferable.

Neil
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#7 diamondsbylauren

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Posted 19 April 2008 - 03:05 PM

Good point Neil. Dealers do trade diamonds with AGS reports on the same basis as GIA graded stones.
However diamonds with AGS reports- especially fancy shapes- are few and far between.
I'd be surpised if AGS reports on more than 2 or 3% as many stones as does GIA.....

#8 denverappraiser

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Posted 19 April 2008 - 04:41 PM

Neil touched upon this, but whoever is offering this diamond needs to let you know the report is not accurate.
What it sound like you are doing is attmepting to base a judgement on a report those in the trade know to be unreliable.

Put it this way- if the diamond was an H/VS2, and well cut, NO dealer would send it anyplace other than GIA. That tells us a lot right there.


This is what I was disagreeing with. 2-3% of them would, and this number increases each year. I agree that GIA is bigger, but that doesn't make them better.

Neil
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#9 diamondsbylauren

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Posted 20 April 2008 - 02:30 PM

I apologize Neil, you are correct. Generally, in these type of conversations I include AGS and GIA, somehow this time I neglected to. That was my oversight.

There is no question in my mind that AGS is grades are as well respected within the trade as those of GIA.
BUT- in terms of market share, you mentioned 2 to 3%. I'm sure your number is close. I'd salo say the two to 3% that we're talking about are generally people who are looking for "ideal cut" diamonds.
I can't recall seeing an AGS report on a Fancy Colored Diamond, for example- although I'd wager they probably have issued some.

Have you seen an AGS Fancy Colored Diamond Report Neil?
DO they use the same terminogy as GIA?

#10 denverappraiser

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Posted 20 April 2008 - 03:13 PM

I was actually referencing you for the 2-3% figure. I could probably figure it out based on the IRS filings from GIA and the financial statements submitted by the lab to AGS but it doesn’t really seem to be worth the trouble. That’s a plausible figure. GIA is much much larger and we’re unlikely to catch up any time soon.

Currently, AGSL services are only for untreated natural ‘colorless’ diamonds in the D-Z color range. I’m told by my secret sources (I’m an AGS member) that reports for fancy colors is one of the subjects currently being debated in the AGS gemological sciences committee. If the GemSci folks decide that this is an appropriate thing for the lab to be doing, the lab will develop a procedure and a report and start offering the service. New ‘products’ is a rather lengthy process. The most recent one is cut grading on ovals by the way. The first report just came out in March of ‘08.

I agree that the primary reason people seek out AGSL grading is because they like the cut grading scales and the only reason to submit a stone when you’re looking for a cut grade is when you expect that it’ll score well. Few people would pay to have a stone ‘certified’ as a 7 cut because that’ll do more harm than good in the marketplace (It’s a scale of 0-10 with 0 being the best). It’s a funny thing about AGS Ideal. It’s actually a pretty tough standard to reach but you’d never know it by looking at the AGS reports in the market. Almost all of them are zeros. The problem is that AGS-0 means a stone meets their exacting standards and can be called ‘ideal’ and the dealer wants to charge a premium for it. AGS-1 means that the dealer expected Ideal and screwed up somehow. Often it’s a rather small detail and it’s an easy mistake to make. AGS-2 and below means that the dealer didn’t understand the question and accidentally sent it to the wrong lab. A significant number of AGS-2’s and 3's will come back GIA-excellent and most dealers know this. All will get at least 'very good'. What happens to all of those AGS 7’s, 9’s and 10’s that GIA will call ‘good’ or even ‘fair’? That’s one of the reasons for using EGL or one of the other 2nd tier labs. Many have report formats where they don’t say anything at all about the cutting or they use some undefined scale where they can be called 'premium' or 'awesome' with no explanation as to what this means.

Neil
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#11 Adylon

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Posted 21 April 2008 - 07:43 AM

New ‘products’ is a rather lengthy process. The most recent one is cut grading on ovals by the way. The first report just came out in March of ‘08.


Don't tell David that, if AGS starts issuing "Ideal" cut grades for more fancy shapes he's going to go bonkers :rolleyes:
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#12 diamondsbylauren

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Posted 21 April 2008 - 10:16 AM

Is really nothing to go "bonkers' about.

In terms of calling a diamond "ideal' I do not believe AGS has the right idea anyway.
I have always loved the diamond with a 60% table, and a 60% depth. It was not until GIA started to grade the cut of round diamonds that AGS responded to this by including such stones into their top cut grade.

What does this tell us? I believe, that what the end result is, is that by trying to be too exclusive in a grade which is based on visual parameters, it makes the grade itself less meaningful.

All of this does not change the fact that the trade does view the color/clarity , and cut grades on ROUND diamonds issued by AGS as reliable.

In terms of the fancy shapes, and even potential fancy color reports- the miniscule marketshare makes this a moot point. As Neil has said, AGS now issues cut grades on oval diamonds. I'm buying and selling diamonds all day long, asnd this is the first I've heard of that. I just don't believe it will impact the market significantly

#13 denverappraiser

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Posted 21 April 2008 - 11:53 AM

David,

The revised cut grading system from AGSL came out more than a year before GIA introduced theirs. GIA was responding to competitive pressure from AGSL, not the other way around.

I suspect it will be at least a year until the AGSL graded ovals start to seriously appear in the marketplace and even then it won’t be in a big way. For now it’s a concern primarily to the cutters. Maybe they’ll get GIA to start grading these too (and princess, emerald and square step cuts). Now THAT would have a market affect.

The largest volume producer of gemstone reports is reported to be IGI, and I suspect EGL International is second with GIA in 3rd place (in that particular ranking). The volume of the lab is not a valid measure of how useful the information is.

Neil

Edited by denverappraiser, 21 April 2008 - 01:54 PM.

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#14 Adylon

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Posted 21 April 2008 - 03:15 PM

Maybe they’ll get GIA to start grading these too (and princess, emerald and square step cuts). Now THAT would have a market affect.


I agree, the general trend will be to make all shapes have a standardized ideal cut grade, both by AGS, GIA, then EGL-USA, EGL and all other labs will follow suit. I think it will actually help the fancy shapes gain in popularity. It will be a welcome change to have "ideal" cuts and install confidence of a well cut diamond in other shapes without needing to purchase a branded diamond. Although the standardization may make people like David and even myself somewhat dissapointed in the lack of individuality in diamonds, it will be much more beneficial for consumers and the industry as a whole if you ask me.

Diamond brands in my opinion will need to offer something much more then just a premium cut in the future.. even the super-duper-ideals will need to add more value other then just cut as diamonds are graded in cut better and better as every year goes by. I also forsee synthetic diamonds eating the market of the super-ideal brands <1ct. "Our synthetic diamond is more brilliant then any natural diamond... the only way you can tell it's synthetic is that it's TOO brilliant!".... I can just see the "battle of the brands" coming soon, and a race up to have the highest super ideal will not be unlike the race down to sell the cheapest diamond, only those with the deepest pockets will win. In the end, quality, design, service, etc will win out as it should. Just my 2c. :rolleyes:
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#15 diamondsbylauren

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Posted 21 April 2008 - 04:25 PM

Neil, your point about volume of labs is well taken.
However I I think GIA does quite a bit more than 2-3% of IGI's volume....

I also disagree with the idea that GIA was responding to "competitive pressure" from AGS, as opposed to simply improving their product in a way that's dovetails with consumers heightened awareness to the importance of a diamond's cut. It's not like AGS seems to be approaching higher numbers- it's still boutique.

Plus, there's still no explanation why in AGS's veiw, three years ago a 60/60 was less than ideal, and now it can be.

How was that not a reaction to GIA?
At that point GIA had already announced that they were coming out with a cut grade.

In terms of fancy shapes, and other unique aspects of the diamond business, I believe buyers that want unique stones are a big part of the market-and I believe they will continue to be so.

If GIA does start to grade fancy shaped diamonds, I would hope that they will follow the path they've taken with round diamonds and make it more inclusive. The old AGS standards for round diamonds were clearly exclusive of many diamonds that are considered very beautiful by experts and consumers alike.


I'm not writing this as a knock at AGS- they seem to have really improved the way they grade round diamonds plus- they have always been very accurate on Color and Clarity.....

I also have alot of respect for Neil

Edited by diamondsbylauren, 21 April 2008 - 04:26 PM.


#16 denverappraiser

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Posted 22 April 2008 - 05:36 AM

I agree that GIA would like to make their services more useful to the consuming public and that the cut grade is an attempt to do that but, in my opinion it’s failed in this objective. It just doesn’t add enough in the form of useful information and by labeling unpopular stones as inferior they are quashing more innovative cutters. I absolutely agree that the old AGS system excluded some lovely stones and included some marginal ones, which is why they changed it. I even agree that the current system does not accurately define what is the most beautiful diamond because that’s a floating target where not everyone will agree about what constitutes the ‘best’. For that reason, I would love to see them abandon the term ‘ideal’ as misleading but it’s a sales reality that people like that term and use it widely. Both sellers and buyers even use it to describe GIA graded stones despite the fact that GIA doesn’t use it at all.

AGS-0 is a considerably narrower standard than GIA-excellent. This is both good and bad. AGS-0’s all share a pretty similar look and a lot of people seem to like it. A customer who buys one can be fairly confident of what they will receive knowing very little more than this about the stone. Not every client wants to go through the learning curve to understand diamonds, most don’t really trust their jewelers and prefer the idea of lab grading and most don’t know that independent appraisers even exist. They want to buy a diamond, get on with their lives and be confident that they got a good one for their money. This is the boutique service that AGSL is offering.

GIA, on the other hand, is trying to be all things to all people. Their scale is what the manufacturers cut to and they’ve made it so inclusive that it’s nearly pointless.

They don’t publish statistics about how many of the stones they grade are assigned the various scores but there is anecdotal evidence that it’s a very top heavy scale. For example:

Today (4/22/08) Blue Nile lists 22,369 round diamonds.
1,264 of those are ‘signature ideal’. Most of these are GIA graded and all that are have GIA-excellent cuts. All that aren’t have been graded by AGSL as 0 and, if submitted to GIA would probably get an ‘excellent’ (a few would not and that leads to an academic discussion about the differences between the grading standards but this overlap is on the order of 90%. AGSL looks to be only a few percent of their offerings so we’re only talking about a dozen or so stones where this issue even applies).
10,101 are ‘ideal’. Almost all of these are GIA graded as well and all that are have GIA-excellent cuts. As with the above, the non-GIA stones are mostly graded by AGSL.
8,452 are Very Good. Interestingly, the AGSL stones here seem to include quite a few AGS-1’s. Most of these would be graded as excellent if submitted to GIA.
2285 are Good
267 are Fair
0 are Poor

This makes a whopping 88% of their offerings are GIA graded Very Good or better. This may be evidence that BN is simply being selective in what they offer but I see similar patterns with other dealers as well. Apparently everybody is very selective. As a shopper, the scale seems to effectively only have two grades, excellent and very good. This strikes me as overly broad to be useful as a shopping tool. Limiting the choices to excellent only rules out about half of the choices including some that would likely be acceptable if the criteria were simply the beauty of the stone and limiting it to excellent or very good rules out a mere 12%.

Note: I’m using the BN search and database for this because I can. They have a very easy system to sort this sort of thing and most of the others, like the one here, simply don’t. This is neither an endorsement nor a disparagement of shopping with Blue Nile, it’s just using a feature of their user interface that others don’t have.

Neil
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#17 diamondsbylauren

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Posted 22 April 2008 - 09:58 AM

GIA, on the other hand, is trying to be all things to all people.



And they seemed to be succeeding handily. I think the whole conversation, while interesting, is pretty moot, because it does not seem that anyone is going to dislodge GIA from their lofty perch- certainly AGSL is nowhere near it....

As far as BN's "inventory" it's relatively meaningless- they don't carry any diamonds darker than J, no I1 diamonds- both of these categories are huge in the marketplace- so using BN as a sample is skewed.

I would also disagree that " most don’t really trust their jewelers"

#18 denverappraiser

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Posted 22 April 2008 - 11:50 AM

In this case I think the fact that the BN offerings are primarily just a repackaging of what they get offered from their suppliers is actually a feature. With the possible exception of the signature stones, they are just offered to them for sale by their suppliers and they’re passing along that offer. I think this makes their selection pretty representative of what’s available in the market, at least for the sorts of goods they are selling. I would love to see statistics from another dataset if you know of one where this particular sorting available.

In your experience, are GIA graded J-Z, I-1 – I-3, modern round brilliant natural diamonds (which are the only stones where the cut grade applies) more frequently graded as Poor – Good than their whiter and/or less included counterparts?

Neil
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#19 diamondsbylauren

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Posted 22 April 2008 - 12:18 PM

In this case I think the fact that the BN offerings are primarily just a repackaging of what they get offered from their suppliers is actually a feature. With the possible exception of the signature stones, they are just offered to them for sale by their suppliers and they’re passing along that offer. I think this makes their selection pretty representative of what’s available in the market, at least for the sorts of goods they are selling.

I feel this is faulty reasoning. In actuality, many ( if not all) of the cutters BN buys from, also sell to many other dealers- and I can tell you from personal experience, many of these cutters carry a far wider range of goods than is shown on BN's site.

In your experience, are GIA graded J-Z, I-1 – I-3, modern round brilliant natural diamonds (which are the only stones where the cut grade applies) more frequently graded as Poor – Good than their whiter and/or less included counterparts?


There are also quite a few IF-SI2 clarity grades in these colors.

I would say that , in general, buyers of diamonds in therse colors are less interested in an "EX" on the cut grade. And many stones in this range never get to GIA for grading- so it is more likely that cutters in these ranges are more apt to go for the most economical, and beautiful diamond, as opposed to many cutters polishing D-J colors. These cutters are forced to take steps to go for EX to meet a market demand....

#20 denverappraiser

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Posted 22 April 2008 - 01:38 PM

Stones that aren't both submitted to GIA and sold with the GIA report don't count (for purposes of this discussion)
Stones cut into designs other than modern round brilliant don't count.
Colors outside the D-Z range don't count.

None of this is to disparage any of those stones, to say that they don't exist to say that there isn't a perfectly good reason that the cutter chose other designs or chose not to submit them to the lab. They simply aren't relevant to a discussion about the breakdown of the GIA cut grades. My contention was that 75% or more of the stones sold with a GIA cut grade are VG or better and that this broad range reduces the usefulness of the grades as a shopping tool. You seem to disagree with this but maybe I'm misunderstanding you. In the case of my Blue Nile study it was a whopping 88%.

Neil
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