Druckenmiller wants to make it clear: “Just because you’ve bought an engagement ring, doesn’t mean you know how to buy gemstones.” It is solid advice, and a great place to start. Here is what else you need to know if you are in the market for some seriously fancy jewellery.
You cannot eyeball quality
Do you know the difference between heated and unheated rubies? Can you spot an emerald that has been oiled, versus one that contains no oil? Probably not. But those enhancements greatly affect the value of stones.
“People have been heating stones for hundreds of years to enhance the colour,” Druckenmiller says. “But a Burma ruby that is unheated is going to be worth 10 or 20 times as much as a heated ruby from Africa.”
As for emeralds, many have little fissures in them, because emeralds can be brittle. Jewellers often use oil to make the cracks less visible. So, an emerald with no oil will naturally be more valuable than one that has been altered.
“It’s not something you can look at and tell,” says Druckenmiller. “People just don’t know. It’s not that they’re wrong to buy them. It’s just inexperience.”
The best way to find out what kind of quality you are dealing with is to enquire, simply and directly. Question the seller as to where the jewel originated and how it has been treated. Ask to see the certification papers. And bring along an expert, or a well-trained friend, to act as backup and offer a second opinion.
Even if you have a lot to spend, do not assume Madison and Fifth avenues are the best places to shop.
While such brand-name emporiums as Harry Winston, Tiffany and Co and K Mikimoto & Co offer plenty of beautiful and expensive pieces, they also build additional costs into their prices. Glamorous stores require hyper-expensive real estate, with advertising campaigns and red carpet events costing millions each year. It is all built into the cost structure of each big brand.
What’s more, these brands do not necessarily offer the highest-quality stones. (Also keep in mind that lower-end big-box jewellery stores sell stones grown in laboratories, a practice so pervasive that this year the Diamond Producers Association launched a marketing campaign called “Real is rare” to emphasise the importance of genuine stones and to bolster business, especially among millennials.)
“Learn as much as you can and find a trusted source, who also could help you learn,” Druckenmiller says. To find the best authentic items at fair prices, visit small, boutique shops and trustworthy private dealers, as well as auctions and estate sales.
At auctions, be persistent
If you do take your chances at public auctions and sales, be prepared to go up against dealers, retailers and brand-name houses such as Cartier and Van Cleef, which often buy back important estate- and museum-quality jewellery to keep in their archives and exhibit worldwide. Why wouldn’t they? The supply of significant jewels and gemstones dwindles every year, thanks to inevitable loss, irreparable damage and collectors who squirrel items into private coffers.
The major gem auctions — such as Sotheby’s, Phillips, Bonhams, Christie’s — typically start in November in Geneva and run through December. Industry insiders who attend them “will be very involved” in the first group of auctions, Druckenmiller says. Then they retreat.
“When it gets to be a week before Christmas, they have likely already spent their money or they have gone on to other things — so you can find bargains,” she says. “This will even happen just at the later end of night sales, when they are dropping out, or their attention wanders. But you have to be lucky. It’s a matter of being really vigilant.”
Refuse to accept old or inferior certificates of authenticity
When you talk to a dealer or retailer, always request certificates of authenticity for any gem.
Look to ensure that the lab certification is from a trusted source (the Gemology Institute of America is the most reputable). GIA’s certification confirms the geographic origin, grade and quality of stones after the institute has determined an item’s gemological identity, alterations and origin. The place where a gem originated is important because certain countries, regions and mines are renowned for the quality of their stones.
It is also vital that certification papers are current. Two years old? Fine. Ten years old? Not acceptable.
Do not underestimate the law of supply and demand
As mentioned above, the supply of top-notch vintage Cartier and Van Cleef jewellery and valuables declines yearly. But buyers in Asia continue to feed the region’s voracious demand for known and historic brands, including those and Tiffany, Hermès International and Chanel.
The imbalance elevates prices.
“It’s the historic names they know, so every year in those niche markets, the demand goes up and the supply goes down,” Druckenmiller says. This is markedly different than buying something in a modern retail store, where lab-grown gems and cultivated pearls, plus costume-style jewellery and altered stones, can be supplied indefinitely.
Combat this by focusing your eagle eye on auction results. Those can give a good indication of current market rates.
“One thing you could do is ask whoever you’re working with, whatever jeweller you go to, if they have a shop: ‘Can you show me auction comps for similar items?’” Druckenmiller says. “That’s a really good way to get a yardstick on valuations. So, if you’re looking at a Cartier Art Deco diamond bracelet, and you see a similar auction result, it might not be exactly the same piece, but if the width is the same, it can give you a good idea for what something similar might be worth.”
If the dealer will not share auction comps with you, walk away.
Know your audience
The biggest stumbling block to buying jewellery for someone else often comes from simple oversight — buying a piece, such as a ring or bracelet, that does not fit the personality of the receiver.
“Try to understand the lifestyle of the person you’re buying for,” Druckenmiller says. “Is she active? Does she use her hands for her job? That person might need something more lightweight, or made from more durable materials, than someone who [leads a more manicured] life.”
Titanium, platinum and diamond are options more rugged than, say, garnet, opal and gold.
If the person you are buying for often wears big rings and chunky bracelets and necklaces, it is a good bet she would like more in a similar vein. If she tends to wear only delicate stud earrings or a thin band around her ring finger, it is likely she is a minimalist.
She might even prefer a wristwatch, Art Deco box or vintage cigarette lighter to traditional jewels. Notice what jewels she wears — if she wears any at all — and select your purchase accordingly.
Do a little research into history
Do your homework. It pays to know the history of jewellery, especially as it relates to fashion and culture. Before YSL and LaCroix were sending Byzantine-inspired costume jewels down the runway, Coco Chanel did it. And she did it best: Chanel’s baubles, brooches and chains inspired generations of fashion designers in the 1970s and 1980s. Her work carries more cachet, especially if previously owned by someone notable — a royal or a celebrity.
It is very simple, Druckenmiller says: “Age adds to value. And provenance matters.” — Bloomberg LP
This article appeared in Issue 816 (Feb 5) of The Edge Singapore.
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