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About BasicHustler

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  1. BasicHustler

    The beginnings of a hustle

    This week went by quickly - mainly in distraction - with little profit. But a few lessons learned. I bought a stone that was listed on ebay as an H/VS1 0.8 and it arrived as a rather brown tinted K/VS2-SI1 0.7. It was a rather curious one because alongside looking decent in photos, it had a valuation from a relatively legitimate firm with no mention. I'm used to seeing evaluations with crazy pricing for insurance purposes, but less used to seeing ones that actively lie about the stone. Thought that perhaps the woman selling it perhaps had suffered from stone swapping somewhere along the way. Or maybe she was the one duping me. Fortunately I had bought it relatively cheap but it sucked up pretty much any opportunity I had for making money as it tied up my cash for the week. In any normal circumstance I would have sent it back, but with other things going on I just thought I'd flip it for what it cost me. That took quite some work - and I hadn't anticipated quite how badly people would react to brownish tint (it didn't help that the thing was set in white gold!) Clearly the market really hates this, which is strange to me. I mean personally I didn't think it was a pretty stone but I could see how it would work fine in a darker gold ring. It did eventually get sold at the price I paid for it, but oy vey did I have to sell hard. It helped that I was selling it alongside a very nice little 0.6 stone G/VVS, which I had picked up for cheapish. This also raises some questions for me: following on from Neil's post above, about having buyers, I have a question about what I should do with bad product. For the last two weeks I've had at least one bad diamond. Ok, not awful, but just things that I know are not very commercial. My question is about whether it's bad form to try to do deals with them alongside better things. That's obviously ideal for me, because it means that I can rescue something a bit shoddy by letting it ride on the back of something nice. But I can also imagine buyers being annoyed by this. This week I did make it clear that in all scenarios the thing was being sold today to whomever offered the most - and I also did offer things separately. My concern here is that I don't hugely want to get a reputation for trying to pass off crap, or for parcelling anything decent that comes through my hands together with the turds. Perhaps I also ought to try taking these sorts of stones to less diamond-y places like chain pawn shops, where my hard sales pitch might convince someone, and it doesn't matter too much - because to them a diamond is a diamond is a diamond. Anyway, off to reinvest, and hopefully next week will be less of a bummer. And in the end I'm still £100 richer than I was a week ago, so although it probably wasn't worth the time or the risk, I'm not going to complain. You can buy a whole stack of masks and hand sanitiser for £100...
  2. BasicHustler

    The beginnings of a hustle

    Another week, another set of deals done. Spent £1000 on stones and came home with £1650. So strangely my average profits have held. This week's lesson was somewhat counterintuitive to me: learning to know my bottom line, and being willing to walk away from deals with people who I had previously sold to. For one reason or another I only had a couple of things to sell this week - and one of them I had spent more on a slightly bigger stone than I would usually like, simply for lack of availability of things that were obviously good deals to my eye. Then when that stone arrived with me it led to some more difficult questions: it was (thank god) 14 points larger than the seller had thought (I had some impression of this from the measurements she had sent me), but it also had a big old surface-reaching feather across the table, which hadn't shown up on the photos. A funny little American ring in a style that doesn't exist here so much: classic sharp edges, in a very lightweight 14k white gold setting. I guess this stone was a sort of medium-high end of high street jewellery: from some company called Helzberg according to the marks, who I don't know on account of not being American, but I was happy to see they are from Kansas City, Missouri - a city where I have spent a fair bit of time, and to which I am close. Not that any US corporation is truly local. Kansas City, MO is mainly otherwise known in business for being the headquarters of Hallmark Corp. I guess the condolence card markets are booming right now, so they'll be doing fine. The other stone was a punt: 0.4-0.5ct bezel set thing with not much gold, but I could take a risk for £200. This second stone turned out also not perfect. Perfectly fine for a cheap stone but poor colour (K-ish I reckon), and a good cut. So I priced up my wares - still more than aware that I don't have much of a clue of what I'm doing - but basing it on the database here minus around 20% + gold spot prices. I figured it should be around £1500-2000 (I knew 2000 might be a little strong), and thought this was a fair price. Took them around to a few places: I'm increasingly learning that many of the guys with the little stands in Hatton Garden are not really open for business with people who want to sell at fair prices: rather, their entire edge (like mine) comes from paying people who don't know what they are selling. And that's fair enough - but it is useful for me to know that there is little point in really trying to bargain hard in these environments unless I have exactly the right thing for them. There is one such hall of traders in particular where, as far as I can work out, everyone is going to offer a near identical price: their business model involves having a look at a rap sheet, giving the stones often just a cursory glance, and offering something in the way of 30-40% of the rap price, which is just never going to be quite enough for me to make reasonable profits - although I guess it gives them enough of an edge to be spending cash, and to make up well for any duff purchases. And this percentage is pretty much set across the room, with traders making small adjustments up and down depending on whether it's something they really want, or have a customer for. That said, all these people are often quite willing to chatter away, give (relatively) straight accounts of the stones for sale, and are full of funny conversation too - which is a rare thing in these times of social distancing, where otherwise everyone just wants to talk about how many people have the virus. To me these are also good places to stop first on my trawl down the street because I can calculate a proper price from the information given to me. No doubt at some point these people will become annoyed at me turning up every week with rings at prices they won't pay. What I have said there applies to one of those trading halls but not all: another is where I have a couple of really great buyers, who are considered and careful. It was with one of them: someone I've now sold to on and off for a month, that I had a bit of trouble this week. He was pushing very hard, and admittedly I was being as stubborn as I usually am. Part of the problem was that this stone raised a question: it was pretty much a clean stone other than this inclusion across the table (which to me looked like a feather, but someone else claimed looked like the remnants of a needle, and, well, what do I know.) To me this seemed like a daft way for a stone to be cut, but I guess cutters are just doing it for weight. The proportions were all good, and I actually figure that the inclusion is so tight to the top of the stone that the buyer is going to be able to polish it out - losing a few points but turning an SI1 into a VS1 in the process. So we discussed the various ups and downs on this. I know lapidary as little as I know diamonds, and don't have a strong sense of what can and can't be done without screwing the proportions of a stone. My elementary understanding of physics makes me think that you can't just do work on the top of the stone without compensating on the bottom. I guess getting a sense of this will be needed in the longer term. After all these conversations I was half-tempted to try to track down a cutter myself to get a better price on the stone. (this seems to involve all sorts of wild risks, of the type I enjoy. Can anyone here put in recommendations for the following: not doing it because it is a risk I shouldn't be taking; good cutters in London with decent prices who will offer fair evaluations of costs and risks; more reasons I shouldn't get involved.) But then I would be breaking my rules, and since I already broke the rule on spending too much on a stone, it was time to flip it. I bargained for like 45 minutes and we were still £200 away from each other, and ultimately I walked away. This morning I am glad of that: I took the stones back up the road this morning, and sold them to a man with a little workshop on one of the side streets. I figure he will actually repolish that stone himself. Glad he's taken my risk away: now ever onwards to buying some more diamonds for the next week of trading.
  3. BasicHustler

    The beginnings of a hustle

    I'm going to refrain from any comment on what parts of David Cameron were cast into swine, although I'm sure it had little of either the daimon or the demos about it. You also just reminded me of how annoyed my little biblical philology brain got by the appearance of this misquotation in radical social movements of the early 2010s: Luke 8:30 is all about appellation - although the truly demonic probably is in that language magic that ricochets between the name and being... at least that's what Goethe thought.
  4. BasicHustler

    The beginnings of a hustle

    Thank you both once again for all the encouragement. I'm carrying on and did a couple more deals this week, and making a fair profit. Right now I seem to be able to make a decent cut - gross profits are about 1/3 of my revenue, which in my mind isn't at all bad. And I basically have no overheads and I'm not taking a wage. I know this is far from the sorts of mark ups that exist in the customer-oriented world (where profits get eaten by overheads, variable capital costs etc.) I don't exactly anticipate it will remain at this level either, but it's not bad for a start. If I can turn over £6500 of small diamonds that cost me £4000 then it's something. And so far I see the biggest danger being a temptation to mess around with higher price stones, which is more risk than I can afford. Back when I used to play poker we always talked about increasing your bankroll by about tenfold before you moved up to the next level of buy-in, and so I will do something similar. To give an example, the standard stones I'm looking at now are 0.5ct, and I'm picking them up set in normally about £100 of gold at about £250-300. And so if I can select G+/SI2+ there is basically profit all day. And if I hit a stone with worse colour/clarity I can probably flip it for the money I paid. Trouble is there are obviously others on the look out for the same thing. But such things do exist enough to make small turnovers. It's also a situation where I'm relatively well protected if I accidentally run into a lab stone since the price differentials increase so significantly on these as the weight increases. Davide: I love that brutalist stuff. And it really is true that it was less the space age (despite the hype) than the era of truly wonderful, demotic, board-poured concrete! What can I say, I'm a total sucker for the the style, whether it's municipal housing, furniture, or the Royal Festival Hall. But I see why this isn't so much a thing now in our own age of tweeness. To make you laugh - my partner (who is previously divorced) wears her aunt's "divorce ring" on her middle finger: a big old plain mid-century diamond ring smashed flat as though it's been run over by train, and the whole thing mounted onto a plain band, and the diamond reset, standing off it. Super 1970s and cool as hell. Neil: Yes, you are right I need to think more about selling. I figure the best thing to do (and what I am doing) is to build some relationships with people in the market, who know that I am bringing them stones on a regular basis at not bad prices, where they can make as regular a profit as I hope to do. I can see that there is real value to be placed in trust as much as there is in finding the right buyer - and I can already get a better price for things I'm selling returning for the third time to the same buyer. And of course I factor in that they also often have costs: 1) they are taking risk off my hands, 2) chances are they will do some work on whatever I sell them, whether it's making decisions over what gets scrapped, what they will sell commercially, what gets repaired or altered, and what gets flipped, 3) often if I'm selling them uncertified stones they will consider getting them certificated if they want to sell them, and not only does that cost a little, but comes with risks if the cert comes back with something unexpected on it, or even on the bottom range of what they had anticipated. With all this in mind and taking it into account, I figure I can still make some cash by offering ok prices and taking a profit. And if for the moment I sell a bit lower to make relationships, that's no bad thing either.
  5. BasicHustler

    The beginnings of a hustle

    Hi Davide, Thanks so much for all your responses - which are extraordinarily useful and answer pretty much all of my questions. No doubt many more will grow in their places. And glad to find someone who agrees about (very) old cut stones. Ha, in my other life, where I write on intellectual history the mid-century is the height of a furious modernism, the very opposite of fustiness and mustiness of grandma's jewellery. But you're right, the commodity world of the postwar boom did inspire the most extraordinary mixture of high value and throwaway. As you say, I'm not really looking to go into this as full time work, but it does seem to be a fun past-time, and there is some cash to be made, so I'm not complaining. And I kind of enjoy the risk of the endeavour - as well as breaking up each boring Friday in the office to go haggle. I guess I'll see how it goes - but this is more for pocket money. I'm a man of few needs: as long as I can pay the rent and have a lump of cheese to grate across every meal I'm not too worried. And because I'm treating this as a sort of bankrolling exercise, I'm not even paying myself and just reinvesting whatever I make. Maybe that's silly and if it consumes more time I can figure how to pay myself a little stipend out of the windfall. I really like your thing on Darwinian jewellery. It makes me wonder what happened to all that Ratner tat. Did it all just get scrapped and the stones discarded? The thing that's funny to me about it all is that really for a lot of that stuff it didn't matter that the diamonds were "bad" as much as it did that they were overpriced for what they were. If you're gonna wear a pair of 30 point studs then literally nobody is going to notice the large brown inclusion on one side of a stone - and anyone who gets close enough to your earlobe to notice probably isn't going to be thinking that much about why your diamond looks a bit dodgy. But I probably need to learn a bit more about the history of diamonds. It seems like the technological wonders of this day and age means that people are increasingly obsessed with the most minor points of a stone, perhaps at the expense of the more major ones. I was writing elsewhere the other week that it seems to me that there are great advantages in many older styles of cuts because as much as the modern cutting makes for great displays of light and colour, it also has a habit of showing up every flaw, as if to make a point of it. I'm also just aware that despite the collapse of Ratners, I see one stone after another from the more "high end" high street jewellers that are I coloured I1s, and effectively the same old thing in ever fancier packaging. And I'm mainly just intrigued by the old cut market because there seems to be absolutely no consensus on the value of these things beyond the most high end stones. Perhaps this is something for me to play with in the future: the very fact that I've already learnt that they're harder for me to sell quickly and at solid prices means it's probably not for now. Which is a shame because I like the things. Thanks especially for the help on pricing. That's super useful. I am still trying to figure out what happens to this stuff when you sell it: I guess commercial rings just go straight back into circulation, and into the window of a jeweller who sells them on. Less saleable things are being broken apart, graded or regraded, traded. But I don't know the insides of the jewellery market - for the moment I figure I can mainly just figure the prices of the stones and the metal - and often sell for close to a known price, and the metal is thrown in as the edge the dealer makes if they aren't going to sell the ring straight to a consumer.
  6. BasicHustler

    The beginnings of a hustle

    Apologies in advance for the long (and perhaps provocative) first post. Hi everyone, I’m new here, but I’ve been doing some reading around the forums and really appreciate a lot that has been written here over many years. I’ve learnt a lot already and have a lot more left to learn. So here’s my story - There’s a pandemic and I don’t have enough work. So, like an idiot (and no doubt you will all agree that this is a genuinely idiotic idea) I decided I would try to make a little cash on the side buying and selling a few stones. To get this straight from the start: I am thoroughly disreputable both in person and personality. I don’t know much about diamonds beyond what I have been able to teach myself relatively quickly. I don’t have experience with gems or jewellery. No doubt somewhere this is all going to go terribly wrong. But I thought, why not learn just by doing - and see where it takes me. I cashed out £300 from a crypto account that has sat there doing nothing for the best part of three years and bought a ring, then sold it. With the money I bought another two and have sold them too and so on. The money is small at the moment: I’m buying tiny little stones for a couple of hundred pounds a go. My main rule is to buy from people on ebay who are offering returns, or from bricks and mortar pawn shops where I can see the things in real life and can see if they are mispriced (surprisingly common in small shops that specialise in electronics but carry the odd bit of jewellery, most of which is trash from low end high street mass production jewellers.) In the last two months I have bought and sold a bunch of rings and have turned my £300 into £1700. Yes the money is small but it’s a start and a fun little hobby. I have reimbursed myself the £300 so at this point it is all just a bankroll. Not only have I spent enough of my life completely poor, but I’ve also played enough poker, to know how to be philosophical about a bankroll. It is what it is, and it’s only yours until you don’t have it any more (not that I ever lost much money playing poker.) If you risk it then you might lose it. And if you are willing to risk it then don’t act like it still belongs to you. I made a decision early on that there are a few rules I can live by: 1) Buy as high quality as I can find, and don’t mess around with dirty looking stones unless you know what you’re doing (which I don’t.) 2) Spread the risk: better to buy a few small cheap stones than one big one - especially since I don’t have a clue what I’m doing it will mean that when I do get burnt I am not gonna get hurt too bad. 3) Also, even if profits are small on small stones, they are very decent as a percentage. Trouble is that undervalued stones are scarce, relying on underinformed or desperate sellers, and so if I need to invest more in stones then I may find myself forced into buying higher value. Actually, to clarify, the desperate sellers are consistently screwed buy disreputable high street pawn brokers. I wanted to actually find out what their edge was like so took a few stones in, which I had figured out the value of, and asked how much they would pay for them - and honestly it is shocking, offering 60-70% less than I could get elsewhere. 4) Avoid market cliff edges: there seem to be a bunch of these in diamond values: between 0.45-0.50ct, between 0.9-1ct etc., between H and J colour, and perhaps somewhere in the middle of SI clarity grades. So if possible it is safer for me to buy a stone that is a little over 0.5ct or a little more on the white side than an I grade just to be safe. I am starting to be able to judge this. I am definitely worse at judging cut than anything else, but I can see if something is, for example, too shallow, and I can see if the polish is bad. 5) Flip often. Look, I know I can buy things and hang around for the right customer and get a better price. And I know that pretty much all the money in the diamond business is doing just that: it’s people in swish suits talking velvety words into lovebirds’ ears so they shell out an extra 300% on a stone of significantly higher quality than they need. Frankly this doesn’t interest me: I am a scruff, and I am not good at advertising. I don’t want a job that involves sitting in a stuffy room and trying not to swear at rich people who are splurging cash on a stone that really should be given to poor people. That said, I have the advantage of working three days a week half a kilometre away from Hatton Garden here in London. If I can flip often, give up whatever risk I’ve taken that week for cash, and go find some more stones the next week, I will. I don’t have loans backing me, and I’m not making jewellery. I’m just taking a cut from some shmuck selling too low. If someone else wants to pay overheads and do all that laa-di-daa stuff and try to make a margin that’s their business. 6) Play the room: it seems that the best way of getting reliable information out of traders you are selling to is to play them off against each other - albeit not in any serious way. For small stones like this that they are buying from an unknown source like me, they are wary of showing their hands. I do always ask them, “what do you see?” Sometimes they are full of shit and say the stone is a piece of crap and offer a paltry amount. Sometimes they are super generous and explain things about the stone. Sometimes they are a mixture. But more often than not they will give some information on what they think they are buying for ungraded stones. This is useful for me because they are way more precise than I am, and by moving between dealers I can actually get a pretty accurate picture of a stone without having to do this work myself. Sure, it’s a little exploitative, but I can get a bit of an education along the way. 7) Be scrupulous about records. I’m going to have to pay tax on all this. To make any kind of profit in the way I’m describing requires a relatively high turnover to profit ratio, and no doubt the money going out of my accounts and back in as cash will need to be accounted for (and is precisely the sort of transactions that will make my bank and the taxman think I’m money laundering, because it makes no sense for someone in my economic position - earning less than £20,000 a year - to be moving cash around in this way.) Need to keep a good eye on when things are bought, when they are sold, so I can declare it all and let the tax man know. Luckily my brother’s an accountant. As you can see this all still seems like a terrible idea, but I’m now convinced that the market has enough holes in it for someone like me to have a hilarious little side hustle. Now, let’s talk some serious talk because there are things I really want to know and which I see as big complicating factors. 1) Dealers markets: Can someone please explain to me what there is in the way of standard percentage mark-ups between the prices diamond dealers trade and places like the database here? I had a look at rapnet and couldn’t make much sense of any kind of standard, but I guess there’s probably like a 15-20% mark up somewhere between monopolist groups and small-time traders and in between there are some dealers who because of their position can get good deals. Is this about right? Without this, I feel like I am selling pretty blind. My strong impression is that the really small guys in Hatton Garden effectively get the same prices as I could get as a consumer, only their position is much more liquid because they have relations with suppliers. And frankly because of the position in the market that I’m occupying, I’m happy to split profit with them, because they are taking my risk away every week and replacing it with cash. 2) Old stones: Ok, so the market seems to hate old stones. Why? To me, as an outsider, it looks like labs like GIA or firms like Rapaport, are part of a motion that cartelises the industry through the standardisation of product. And everyone plays along. It depresses me that when I speak to dealers about this they are taking really pretty old looking stones (or which at least look pretty to me) and saying “yeah I’m gonna recut that into a modern brilliant.” Really? I mean an old stone is what it is, and i understand that resources are scarce and all that, but this seems kind of idiotic to me, because it amounts to wrecking a whole lot of good historical product for immediate fashion. Another question on old stones. Lots of what I see that is late 19th century especially has this look to it: compared to modern stones of *decent* clarity grades it is wildly clear and glassy. Why and how are these old mine cut stones like this? Sure they have the odd carbon inclusion but zero cloud. Is this to do with how cutters were choosing the gemmiest part of the rough to cut in a way that doesn’t happen now? Or are the diamonds just different? Or does it just look this way because of how they are cut? To me it is really very noticeable. Also to me this look is just beautiful, but I guess the market disagrees. 3) Old stones in the long term: again, as an outsider looking at this heavily disrupted market, it seems like within a decade almost all the people who want the ideal cut brilliants are just gonna shift to lab diamonds, because the price is so much better. My main question is, does this not mean that there will be a sort of contrary motion in which people looking for mined stones want them to look like the old stones? I can seriously imagine an emerging market here for Old European Cuts - which would make the severe undervaluation of these stones even more severe, and ought to be exploited by anyone who has the capital in the coming years to invest. But maybe I’m just wrong here - just a hunch. Similarly, I can imagine that with the enormous speedy production of lab stones, there is going to be a coming avantgarde of experimentation in cutting new designs - because the materials will be cheap enough for people to just try things out - and similarly there will likely be a move towards cutting lab stones into old mine cut variants since all of those are getting rapidly eaten up by recutting. 4) What is up with the hatred of mid-century unfussy jewellery? Nearly everything I find that is dirt cheap is like this. And it’s strange to me that at a time when the markets for mid-century modern furniture is absolutely booming, the jewellery equivalent couldn’t be more cold to it. If something is bauhaus-style in any other decorative art it is fawned over. Again, a gap in the market perhaps. But it just seems extraordinary to me that even with the small stones involved I can pick up utterly beautiful modernist 1940s - 1970s modernist rings for the price of the gold plus the value of the stones. 5) Lab reports: I can see that there is another gap in the market for people who are willing to buy stones and certificate them. This one probably isn’t for a rank amateur like me. I had a few chats with the dealers I dealt with, and given I am bringing them product and small profit they basically said if I want anything certificated they would stick it in with their consignments to GIA and do it for me at cost price. Obviously this can be quite a way to lose value on diamond if you misjudge it and the report comes back colour and clarity and cut grades way off what you anticipated (I can see this probably isn’t for me.) But from what I can see of the market for mid-priced stones there are lots floating around that gain more value from certification than the cost of it. Is this correct? I guess there is less of this to do here from a UK perspective, where the trend really isn’t for such big stones at all 6) More on the future of the market: since the US seems to be tending towards civil war, with 1/3 of the workforce out of work, this looks like this is going to have a wrecking effect on diamonds in the coming years. That is, especially when the American market is so dominant. On the other hand, the instability of currencies should drive money into tangible assets (and I can see why people wouldn’t go for property right now!) which will mean boosts in precious metals and perhaps in diamonds too. Is this already happening? I know that diamonds - at least at rock bottom traders prices - have a long history of holding value pretty well. Less bouncy than gold, which at this point in history is effectively a sensible hedge against national and federal banks that are rather trigger happy with the old inflationary measures. That’s all my questions for today. Please remind me that this endeavour is utterly idiotic, and I apologise for my strident opinions. Once again, thank you for all you have all written. I'll carry on documenting this process as I go on, and hopefully will share some of my learning, my mistakes, and all of that!