Same stone to 4 labs - Is it a wash?

[kenny]

I have read over and over that:
1. EGL Israel is softer than EGL USA, which is softer than GIA, which is perhaps softer than AGS.
2. The best stones are sent to the best labs.
3. Labs don't even use the same terminology, GIA's highest is Excellent, AGS's is Ideal, and they ain't the same.
4. An AGS H, SI1 will command a higher price than an EGS Israel H, SI1 (two different stones).
5. The same stone will have a different price in different markets, internet, B&M, Beverly Hills B&M, etc.
6. Some customers just pay the first price mentioned, others negotiate hard.
7. The FTC allows the same lab one step of slop - they can call it an F on one day, the next day a G.
8. Certain stones are more or less likely to be sent to certain labs.
9. A given seller usually won't stock stones form all the labs.

Now my question.

Lets take a single 1-carat stone that was sent to several labs:
Lets ignore the cut, since that is more of a can of worms.
Assume this is what the labs gave it (ignore whether these actual numbers are likely).

AGS . . . . . . . . I SI2
GIA . . . . . . . . H SI1
EGL USA. . . . . G VS2
EGL Israel . . . . F VS1


Take all other variables OUT of the equation so the only difference is which lab wrote the report.
Let's even assume the stone is stocked by the same seller but under four different stock numbers.

Will the price be about the same for all four?
In other words do market forces make lab choice a wash when it comes to price?

 

[Garry H (Cut Nut)]

Kenny we have done all this for you.
On behalf of Pricescope consumers, We sent 16 stones to 3 labs - none got the same grades from all 3 labs.
We also compared the prices those diamonds would fetch with each grading report.

Home page, lower left corner.

 

[denverappraiser]

What an interesting question.

The dealers in selecting the labs obviously think they can increase their profits by their selection. That’s why they chose that particular lab. The lab study on the front page of PS addresses some of this but there is definitely an interesting issue here. It’s not the same with every stone. It is not correct to say that EGL-Israel will always grade a particular stone differently from AGS or any other lab. Recently I saw a correctly graded IGI, 1.70, VVS2-F. This stone was sold rather cheaply because it had the IGI paper and the dealer almost certainly could have commanded a higher price if they had taken the time and expense to send it to GIA. In this case, the customer got a great deal, in part because of the brand of the report but it would be a mistake to conclude from this that all IGI graded VVS stones are therefore a great deal.

Date: 10/19/2005 8:19:08 AM
Author:kenny

7. The FTC allows the same lab one step of slop - they can call it an F on one day, the next day a G.

This is not correct. The FTC isn’t involved.

Neil Beaty
GG(GIA) ISA NAJA
Professional Appraisals in Denver

 

[Garry H (Cut Nut)]

Date: 10/19/2005 8:41:05 AM
Author: denverappraiser

Date: 10/19/2005 8:19:08 AM
Author:kenny

7. The FTC allows the same lab one step of slop - they can call it an F on one day, the next day a G.

This is not correct. The FTC isn’t involved.

Neil Beaty
GG(GIA) ISA NAJA
Professional Appraisals in Denver

Maybe they should have been Neil?
http://rapnet.com/news/newsitem.asp?num=13474&type=all&topic=all

I have seen and had a quantity of stones graded by IGI india and find them to be more consistent than GIA and very fair on clarity. Perhaps 1/4 grade softer on color - but very consistent.

 

[diamondlil]

Date: 10/19/2005 8:25:24 AM
Author: Garry H (Cut Nut)
Kenny we have done all this for you.
On behalf of Pricescope consumers, We sent 16 stones to 3 labs - none got the same grades from all 3 labs.
We also compared the prices those diamonds would fetch with each grading report.

Home page, lower left corner.

I just wanted to say how much I enjoyed this comparison, Gary.

 

[denverappraiser]

I''m not sure how to tell which IGI lab graded a stone and I haven''t noticed if the more recent ones are better than the older exams but I''ve seen some really dreadful grading done in their name. Consistency is the key.

The FTC is an interesting can of whoop-ass that none of the labs are anxious to see opened. Consumers almost universally view a lab report as an iindependent lab that is certifying the stone as being of a particular grade dispite the fact that labs insist that this is not the service they offer and they write this on every report. I agree that there is clear confusion and perhaps even deliberate deception going on, but I think it is unreasonable for the FTC to require the labs to offer a service that is fundamentally different from what they say they offer just because dealers misunderstand what they are offering and describe them to consumers in inaccurate ways.

Neil Beaty
GG(GIA) ISA NAJA
Professional Appraisals in Denver

 

[Regular Guy]

CYA has numerous potential meanings in this regard.

For example, Neil you've made at least one post backing David of NY colored diamonds, re-explaining that certifying agencies are nothing of the sort. From my point of view, it's a clarification that does not substantially serve to clarify, and the intent of both Kenny's question, as well as Garry and Leonid and Dave et als effort in the Grading Survey is on point...and that market forces work sufficiently to represent the meaning of the difference...at least...by and large. To the extent the market is off, or we think it is off...we play arbitrage, and may try to game the system...based on what we may think, correctly or not, is special knowledge that gives us the ability to see a bit more clearly than the average schmo. Pricescope's value has been here, and...to it's credit...it's value is going somewhat down (at least from this point of view), based on it's success.

Date: 10/19/2005 9:06:34 AM
Author: denverappraiser


The FTC is an interesting can of whoop-ass that none of the labs are anxious to see opened. Consumers almost universally view a lab report as an iindependent lab that is certifying the stone as being of a particular grade dispite the fact that labs insist that this is not the service they offer and they write this on every report. I agree that there is clear confusion and perhaps even deliberate deception going on, but I think it is unreasonable for the FTC to require the labs to offer a service that is fundamentally different from what they say they offer just because dealers misunderstand what they are offering and describe them to consumers in inaccurate ways.

Neil Beaty
GG(GIA) ISA NAJA
Professional Appraisals in Denver

In my MBA program a decade ago, where my prof was talking about public policy and the cigarette companies, he was impressed about the actual language used on the packages of cigarettes that was designed to cover themselves. He was impressed by this. I noted the size of print should be considered, and the nature of the delivery of the message another. Now, this was some time ago, and just look at the consequences of all of this. The most effective deliverer of messages about not smoking has clearly become Phillip Morris, in a turn that would make just about anybody's eyes cross, who tries to study this.

A rose is a rose, as they say, by any other name. Generally you get what you pay for, but, depending on the time you have to invest, it's always reasonable to look for a bargain. One insight...in rounds, and with their coming publishing of not only crown & pavilion angles, but also other data, once GIA does put this info out, new values will be there to be had. Still, I think this will be optimized best if more is out there on ways to interpret that coming minor facet info that I've been able to put together.

Regards,

 

[lumpkin]

Date: 10/19/2005 9:06:34 AM
Author: denverappraiser
I''m not sure how to tell which IGI lab graded a stone and I haven''t noticed if the more recent ones are better than the older exams but I''ve seen some really dreadful grading done in their name. Consistency is the key.

....

Neil Beaty
GG(GIA) ISA NAJA
Professional Appraisals in Denver

I was at the mall a few weeks ago and one of the jewelry chains was having a "remount event" and I went to take a look at their settings. While I was there I looked over the loose diamonds they had on display in the case. There was one diamond graded as an F by IGI and it was clearly not colorless. I''m not that color sensitive and it was the first thing I saw. They also had a diamond graded M by IGI and it was a muddy brown. Since I own an M stone, I compared them. The two diamonds looked nothing the same -- their M was much smaller, but still much darker. I would have expected mine to be darker. From that observation I would not buy an IGI stone without seeing it, and still probably not.

 

[lumpkin]

Date: 10/19/2005 8:25:24 AM
Author: Garry H (Cut Nut)
Kenny we have done all this for you.
On behalf of Pricescope consumers, We sent 16 stones to 3 labs - none got the same grades from all 3 labs.
We also compared the prices those diamonds would fetch with each grading report.

Home page, lower left corner.

Gary, that was extremely informative. Thank you for directing us to it.

 

[denverappraiser]

Ira,

Gosh, I though David was supporting me on this but I suppose the effect is the same. We do seem to agree on this point. Just because people wish that the labs were certifying something does not make it so and I think the misunderstanding about this is the root of a great deal of trouble in this industry, for both consumers and dealers. The difference has to do with the liability of the labs and the service that people wish was being offered is considerably more valuable than what is currently being offered. It would also be considerably more expensive.

The key subject here revolves around the value of the ‘certificate’, not the value of the diamond. I think we will all agree that the presence of a lab report adds value and that, all other things being equal, a GIA report is worth more than an EGL-Israel report, at least in the US. Deciding how much value is added is an interesting question. The study by Garry et. al. suggests that the brand of the lab results in a value difference of a few percent. I have not done anything like a thorough study but I’m inclined to think it’s more and the behavior of the dealers who will send a stone to several different labs in order to get a particular description would suggest that they think it’s more.

Neil Beaty
GG(GIA) ISA NAJA
Professional Appraisals in Denver

 

[Regular Guy]

Neil,

Because you DO deal daily with people who are caused pain because they rely on what is their possible misinterpretation of the "grading document" (see what you cause me to write; it''s just not as simple as "cert") they receive, I can appreciate your sensitivity to it.

Still, if I want to go copy something, your constraining me from saying I want to go "xerox" it is only, as far as I''m concerned, to the benefit of the company that also bears that name.

See a simple definition of "certify."

And I quote: "To attest by signature, to the best of ones knowledge, that the information provided is correct."

Who''s to say what the value of "certifying" should be. What these agencies plainly try to do, despite any "terms" they endeavor to use to explain that that is not what they do, is "certify" that a diamond has "x" characteristics. That people over or undervalue this "statement" that these grading agencies produce is, again, a matter for market forces, as far as it makes sense to me.

 

[aljdewey]

Perhaps, Ira, you may want to re-read those definitions you pointed to, and focus especially on this one:

"To attest by signature, to the best of one''s knowledge, that the information provided is correct."

When people buy a stone with a certificate, they are paying for an expert opinion on the stone''s properties. Nothing more and nothing less.

Because grading is subjective, it''s not FACT.......and therefore, cannot be "right" or "wrong".

As far as "market forces" go.......if chain stores or the like make representations to customers suggesting that a certificate is akin to a guarantee, that''s not the fault of the labs. It''s the fault of the vendors.

 

[Regular Guy]

Date: 10/19/2005 11:08:26 AM
Author: aljdewey

As far as ''market forces'' go.......if chain stores or the like make representations to customers suggesting that a certificate is akin to a guarantee, that''s not the fault of the labs. It''s the fault of the vendors.

Al,

No quarrel from me. This does not make the paper less of a "cert" (there, I said it!).

 

[denverappraiser]

The presence of a grading report in a sales presentation is generally taken to mean that an independent lab guarantees that the stone described meets some universally accepted standard for each of the attributes described. It comes as a surprise to almost everyone that this is not the case. Even such simple attributes as the weight can often be flexible depending on who did the grading and the procedures used. This is usually spelled out in the microscopic font on the report itself but sometimes even that is omitted. Not surprisingly, very few people actually read what it says but if you photoduplicate the back of a an EGL-USA gem ID card and enlarge it to a readable size you can read what it says.

Calling these documents ‘certificates’ and, more importantly, describing the subject diamond as ‘certified’ makes this problem worse. I realize that I’m in a tiny minority in refusing to use these terms but this doesn’t make me wrong. Along with David, neither GIA nor AGS will use these terms either. Ira, it warms my heart to see you call them grading reports, even briefly. Welcome to the minority.

Neil Beaty
GG(GIA) ISA NAJA
Professional Appraisals in Denver

 

[diamondsbylauren]

HI Everybody!

From the Google defininition of "Certify"
*"guarantee payment on; of checks"- As Neil points out NO lab guarantees it''s results..... EVEN THE STONE''S WEIGHT!
*"license: authorize officially; "I am licensed to practice law in this state" - again- using this term to describe an identifiaction report is misleading- implying it is somehow "endorsed"- like a drivers license. WRONG~!!!!!!!
*"declare legally insane"- they tried to do this to me, and well, NO WAY!!!!!heheheheheh OR- anyone who thinks a report is a "cert" may fit into this category

While I appluad the effort, and intention of the PS study, 16 stones is statistically insignificant- as is Garrys anecdotal experience with EGL India.
That means conclusions drawn are simply not accuarate- PLUS- and this is a bigger factor- the trade does not veiw any other lab -besides GIA, and to a lesser extent AGS- to be credible.
So, a dealer with a diamond carrying ANY EGL report is simply not going to be able to say- LOOK- the study shows 3% difference, so my G/SI1 EGl is only worth 3% less than a diamond with a GIA report.
It''s a long slirppery slope-once a dealer strays from the industry standard, the questions begin- and the prices fall.......
Kenny, you have an interesting question- and it does seem possible that the price for a dimaond graded H/SI1 from GIA might be the same as the price for a diamond graded G/VS2 from EGL......but there''s simly no consistency in the non GIA reports, therefore drawing reliable price conclusions is not possible.

 

[Garry H (Cut Nut)]

Date: 10/19/2005 2:50:38 PM
Author: diamondsbylauren
HI Everybody!

From the Google defininition of ''Certify''
*''guarantee payment on; of checks''- As Neil points out NO lab guarantees it''s results..... EVEN THE STONE''S WEIGHT!
*''license: authorize officially; ''I am licensed to practice law in this state'' - again- using this term to describe an identifiaction report is misleading- implying it is somehow ''endorsed''- like a drivers license. WRONG~!!!!!!!
*''declare legally insane''- they tried to do this to me, and well, NO WAY!!!!!heheheheheh OR- anyone who thinks a report is a ''cert'' may fit into this category

While I appluad the effort, and intention of the PS study, 16 stones is statistically insignificant- as is Garrys anecdotal experience with EGL India.
That means conclusions drawn are simply not accuarate- PLUS- and this is a bigger factor- the trade does not veiw any other lab -besides GIA, and to a lesser extent AGS- to be credible.
So, a dealer with a diamond carrying ANY EGL report is simply not going to be able to say- LOOK- the study shows 3% difference, so my G/SI1 EGl is only worth 3% less than a diamond with a GIA report.
It''s a long slirppery slope-once a dealer strays from the industry standard, the questions begin- and the prices fall.......
Kenny, you have an interesting question- and it does seem possible that the price for a dimaond graded H/SI1 from GIA might be the same as the price for a diamond graded G/VS2 from EGL......but there''s simly no consistency in the non GIA reports, therefore drawing reliable price conclusions is not possible.

David the 16 stones were a small #.
But the comparison between prices was from a very very large data base and was done by Leonid who has a PhD in math physics.

Do you think GIA''s reputation will be damaged by the admission that they seem to have been involved in corruption of 4 graders?

 

[diamondsbylauren]

Garry- I have tremendous respect for anyone who''s gone thru what it takes to get a PhD- including Leonid.
But that does not erase the fact that attempting to caluculate a formula which accurately indicates a repeatable, consistent price differential between a diamond with a GIA report, and one with any other is impossible.
That''s really the point here- due to inconsistencies with other labs, no valid, consistent price comparisons can be drawn.

GIA''s problems are a shame for all of us in the trade- but it does seem they''ve taken immidiate definitive action to correct the problem

 

[Garry H (Cut Nut)]

Date: 10/19/2005 4:50:00 PM
Author: diamondsbylauren
Garry- I have tremendous respect for anyone who''s gone thru what it takes to get a PhD- including Leonid.
But that does not erase the fact that attempting to caluculate a formula which accurately indicates a repeatable, consistent price differential between a diamond with a GIA report, and one with any other is impossible.
That''s really the point here- due to inconsistencies with other labs, no valid, consistent price comparisons can be drawn.

GIA''s problems are a shame for all of us in the trade- but it does seem they''ve taken immidiate definitive action to correct the problem

David you surely do not maintain that GIA is consistent?

The point to the statistical part of the survey has clearly gone over your head, or you have not read it with a view to understanding what Leoniod did because your criticism is just off the mark.

Leonid reviewed what vendors of diamonds did with their diamonds by pricing them.

I had an exchange with a vendor i know well personally. He had a 2ct stone listed on Rapnet - I emailed him and asked if he had another to make a pair. He was blunt and said - "No way - not at that price; the stone is an SI2 GIA graded as SI1"
As you well know there are plenty of these stones.

The thing is there is a myth that people (like you) have propogated that GIA graded diamonds are better. Our survey showed this was not true.

So how come you promote GIA endlessly, when you know that AGS is on blalance likely to be more strict?

 

[diamondsbylauren]

Date: 10/19/2005 5:37:57 PM
Author: Garry H (Cut Nut)

Date: 10/19/2005 4:50:00 PM
Author: diamondsbylauren
Garry- I have tremendous respect for anyone who''s gone thru what it takes to get a PhD- including Leonid.
But that does not erase the fact that attempting to caluculate a formula which accurately indicates a repeatable, consistent price differential between a diamond with a GIA report, and one with any other is impossible.
That''s really the point here- due to inconsistencies with other labs, no valid, consistent price comparisons can be drawn.

GIA''s problems are a shame for all of us in the trade- but it does seem they''ve taken immidiate definitive action to correct the problem

David you surely do not maintain that GIA is consistent?

The point to the statistical part of the survey has clearly gone over your head, or you have not read it with a view to understanding what Leoniod did because your criticism is just off the mark.

Leonid reviewed what vendors of diamonds did with their diamonds by pricing them.

I had an exchange with a vendor i know well personally. He had a 2ct stone listed on Rapnet - I emailed him and asked if he had another to make a pair. He was blunt and said - ''No way - not at that price; the stone is an SI2 GIA graded as SI1''
As you well know there are plenty of these stones.

The thing is there is a myth that people (like you) have propogated that GIA graded diamonds are better. Our survey showed this was not true.

So how come you promote GIA endlessly, when you know that AGS is on blalance likely to be more strict?

HI Everyone,
Garry, they liked me so much in sixth grade, they made me do it twice

....still I did read the study- a number of times, I think I understood it....

I again say that I commend the participants the the study , and it''s intention. It attempts to answer some very pertinant questions, and does this, to some extent. A limitiation, for example, is that the largest stone in the test was a 1.23. If we used a 5.00D/VS1 the price differential between EGL and GIA would be far greater- as might have been the grading results.

Of course there could be cases where the EGL diamond presents a good buying opportunity, but clearly, in this industry, diamonds of the highest value go to GIA, or AGS.
A .69 E/VS1 is not the same as a 2.50 E/VS1. There''s simply so much money at stake that dealers here in NYC only consider GIA for such a stone. So much so that anything else on a high value diamond is looked at skeptically
It''s a big world and maybe it''s different in Australia....

Garry, I don''t mean diss AGS- they issue a great report, and they are very consistent. But for right now at least- AGS is only seen as the lab for "IdealCut" diamonds. I''ve never seena Fancy Colroed diamond with an AGS report. Other than princess cuts- I have seen very few fancy shapes with an AGS report.

Maybe they''ll expand into these areas- but old habits die hard, and GIA has a very stong foothold on these segments of the diamond industry.

I''ll be thge first to admit a mistake- and I did not write correctly before when I said

"but there''s simly no consistency in the non GIA reports, therefore drawing reliable price conclusions is not possible."

- I should have said less consistency.

Of course GIA is not 100% consistent. Mainly because the nature of diamond grading can never be that precise
In terms of what constitutes a VVS1 versus a VVS2- c''mon- the difference is so small that it''s bound to go one way one time, and another way if you were to re-submit to GIA.
SI''s are another ball of wax entirely- because there''s a lot more difference between an SI1 and an SI2, as compared to the difference between VVS1, and VVS2- this again makes it very subjective.
I feel sure that if one was to run another study- this time re-submit 10 stones 3 times each to GIA- you''d have a variety of results on every stone.

There are machines in existance right now that can grade a diamond for both color and clarity. Diamond grading at GIA is done by humans- I agree with this.

IN terms of GIA''s grading of fancy colored diamonds - I feel they perform remarkably well- of course there is going to be some debate about borderline stones- but that''s just the nature of grading diamonds.



Garry- if the dealer you spoke of actually did have an eye clean SI2 of similar cutting style, dimensions and color- wouldn''t that have constituted a good pair? If the diamonds are eye clean if you were to explain this clarity issue to the buyer , it sounds like a win/win situation

 

[valeria101]

Date: 10/19/2005 9:03:02 PM
Author: diamondsbylauren

Date: 10/19/2005 5:37:57 PM
Author: Garry H (Cut Nut)

Date: 10/19/2005 4:50:00 PM
Author: diamondsbylauren

But that does not erase the fact that attempting to caluculate a formula which accurately indicates a repeatable, consistent price differential between a diamond with a GIA report, and one with any other is impossible.

The thing is there is a myth that people (like you) have propogated that GIA graded diamonds are better. Our survey showed this was not true.

I'll be thge first to admit a mistake- and I did not write correctly before when I said

'but there's simly no consistency in the non GIA reports, therefore drawing reliable price conclusions is not possible.'

- I should have said less consistency.


There are machines in existance right now that can grade a diamond for both color and clarity. Diamond grading at GIA is done by humans- I agree with this.

IN terms of GIA's grading of fancy colored diamonds - I feel they perform remarkably well- of course there is going to be some debate about borderline stones- but that's just the nature of grading diamonds.

Wow!



Would it be completely off to say that GIA has allot more going on for their color & clarity grading than consistency could ever provide by itself?

It is their grading system after all, and I am inclined to believe that this gives them perpetual precedence over any follower's credibility. Even disregarding market share

There are two or three tests of grading consistency like Pricescope's and they are informative, of course. What I find even more intriguing is that these tests are incredibly scarce. If grading consistency is of such paramount importance, one would think that this could not be the case.

 

[windowshopper]

Date: 10/19/2005 11:41:28 AM
Author: denverappraiser

The presence of a grading report in a sales presentation is generally taken to mean that an independent lab guarantees that the stone described meets some universally accepted standard for each of the attributes described. It comes as a surprise to almost everyone that this is not the case. Even such simple attributes as the weight can often be flexible depending on who did the grading and the procedures used. This is usually spelled out in the microscopic font on the report itself but sometimes even that is omitted. Not surprisingly, very few people actually read what it says but if you photoduplicate the back of a an EGL-USA gem ID card and enlarge it to a readable size you can read what it says.

Calling these documents ‘certificates’ and, more importantly, describing the subject diamond as ‘certified’ makes this problem worse. I realize that I’m in a tiny minority in refusing to use these terms but this doesn’t make me wrong. Along with David, neither GIA nor AGS will use these terms either. Ira, it warms my heart to see you call them grading reports, even briefly. Welcome to the minority.

Neil Beaty
GG(GIA) ISA NAJA
Professional Appraisals in Denver

while i must admit to be THOROUGHLY confused by all this, I will say that I loathe that term "certified" --in all cases it is infering a guarantee which does not exist..............................................and I was misled by it (or should I say misunderstood it-- to take the burden upon myself) before I got some edu-cation here on pricescope (

)

 

[denverappraiser]

Date: 10/19/2005 5:37:57 PM
Author: Garry H (Cut Nut)

I had an exchange with a vendor i know well personally. He had a 2ct stone listed on Rapnet - I emailed him and asked if he had another to make a pair. He was blunt and said - ''No way - not at that price; the stone is an SI2 GIA graded as SI1''

David,

This is a strikingly good example of the problem.

Both Garry and his dealer clearly recognize that an SI2 with a GIA-SI1 is not the same thing as an SI2 that GIA calls an SI2 and neither one is the same as a stone called an SI2 by someone else. This is completely independent of the gemological properties of the stone. These would be different animals and they would be expected to come at different prices even if they were all describing the same stone. I think this is want Kenny’s original question was designed to penetrate. The ‘cert’ is not just a description of the diamond as it was 20 years ago, it has become an important part of the product.

Neil Beaty
GG(GIA) ISA NAJA
Professional Appraisals in Denver

 

[stonecrab]

Guys,

Part of this is a self-fufilling prophecy. I think a big part of this is the fact that most of the "better" higher value stones go the the GIA in the first place. This will add some "skew" to the ENTIRE industry.

Since all labs are not regarded as equal, the lab that is historically preferred (GIA) will end up with the lions share of the high-end stones. Now, this might slowly be changing for the AGS. Although, I would be interested to see a study of high-end dealers inventories of Non-GIA and Non-AGS graded stones. Is this a public perception problem, or is it a consistency and accuracy problem?

Food for thought.

 

[RADIANTMAN]

Hi guys

I''m coming into this debate a little late, but figured I''d throw my 2 cents in.

1. A GIA or AGS report, right or wrong, creates a pedigree for the diamond that increases its value in a way that the other labs simply do not. This is a fact in the marketplace which results from the strength of the two brands. The only reason for a vendor to use another lab is because, overall, they can make more money on their diamonds due to differences in grading standards. Unless diamond dealers are stupid, the discounts on non GIA/AGS diamonds must be smaller than the benefit gained by dealers in using those labs.


2. The pricescope lab survey is extremely misleading, not only because the sample is too small, but because it completely ignores the "pre-grade" process. While the EGL grades many diamonds as strictly as the GIA or AGS, most of those certificates are not purchased by the trade. This is because the EGL, like many other labs, provides a "pre-grade" service for a nominal fee. It only makes sense for a vendor to purchase and market the "lucky" ones. As a result, the grading of non GIA or AGS diamonds actually available for sale is far more lenient than the pricescope survey indicates.

It is disappointing that a survey with such an important and obvious flaw is presented here on pricescope. In the interest of accuracy, the survey should at least be amended to discuss the pre-grade issue. Otherwise, it has the effect of misleading rather than educating the consumer.

 

[Regular Guy]

Kenny, look what you caused.

Stonecrab, I think this is less a "nefarious" a matter of self fulfilling prophesy (though that could be descriptive), and more natural hierarchy.

Radiantman, to my reading, you are more clear with this issue this time around than last. Though I think you point has validity, I think a more clear exposure to procedures that those who routinely submit stones for grading certificates is in order. Certainly some of these are readers here, and might speak up?

Finally, in contrast to the problems caused by the misapplication of trust that has been the focus here, in another thread, I review the upside of trusting a certifier (and Radiantman, your first point is well stated, too). When buying a diamond, you want to have trust. A certificate can free you to use your vendor of choice, if you either trust its evaluation (new AGS), or trust what you can impute with it, after you bring a slide rule to it (GIA post 1/06). Of course, more assistance from a trusted jeweler can always be good, and a qualified appraiser never hurts.

Still, nice to know "who loves ya, baby."

 

[diamondsbylauren]

Ira,
The procedure that Stan ( troublemaker...

) is talking about is this:

A dealer can submit a diamond to EGL USA ( in NYC) for a preliminary result.
EGL will inform you of the color and clarity for about $20.
Then the business who submitted the diamond can choose to have EGL print the report- and pay the full price ( about $85)- or they can simply keep the preliminary report number on file- with this number EGL will issue the full report for up to a year, again for the same charge. Or they can eat the twenty bucks and try to sell as an "unceritifed" diamond.
Once you send a diamond to GIA, you''re payiong ther price- whether or not you like the grade.

I don''t know that this really affects this study per se- but it does point out the problems of even trying to draw a consistent repeatable differential between EGLUSA and GIA

 

[Garry H (Cut Nut)]

Date: 10/20/2005 10:46:17 AM
Author: RADIANTMAN
Hi guys

I''m coming into this debate a little late, but figured I''d throw my 2 cents in.

1. A GIA or AGS report, right or wrong, creates a pedigree for the diamond that increases its value in a way that the other labs simply do not. This is a fact in the marketplace which results from the strength of the two brands. The only reason for a vendor to use another lab is because, overall, they can make more money on their diamonds due to differences in grading standards. Unless diamond dealers are stupid, the discounts on non GIA/AGS diamonds must be smaller than the benefit gained by dealers in using those labs.


2. The pricescope lab survey is extremely misleading, not only because the sample is too small, but because it completely ignores the ''pre-grade'' process. While the EGL grades many diamonds as strictly as the GIA or AGS, most of those certificates are not purchased by the trade. This is because the EGL, like many other labs, provides a ''pre-grade'' service for a nominal fee. It only makes sense for a vendor to purchase and market the ''lucky'' ones. As a result, the grading of non GIA or AGS diamonds actually available for sale is far more lenient than the pricescope survey indicates.

It is disappointing that a survey with such an important and obvious flaw is presented here on pricescope. In the interest of accuracy, the survey should at least be amended to discuss the pre-grade issue. Otherwise, it has the effect of misleading rather than educating the consumer.

Stan it is a valid criticsm, and we did consider this idea. But it would be hard to ''prove'' and we did want to present a factual report rather than one steeped in opinions.

More importantly we considered the idea that it is very common with GIA to contest their grading. Some dealers suggest that GIA use this process as an additional revenue source, as they have a good chance to get a better grade - but the process adds even more additional cost.

Now since all the stones already had GIA certs, we fully expected that at least some of the stones had already had their grades improved on GIA''s first grading notification.

Again, we did not discuss this as it is conjecture rahter than fact that we could prove.

 

[pricescope]

Date: 10/19/2005 2:50:38 PM
Author: diamondsbylauren

That means conclusions drawn are simply not accuarate-

David, could you please tell exactly what in the conclusions is "simply not accurate".

 

[diamondsbylauren]

The lab grades did however confirm some of the market myths, such as EGL USA color grades can be softer and AGSL clarity grades can be stricter than GIA-GTL. However, we found no support for reports of EGL USA color grading being more than one grade different to the other labs. In fact all lab grades were within a single grade of difference for color or clarity.

I have seen cases of EGL stones to be two grades off GIA - based on my own observations. It is very rare , but it does happen on both color and clarity. Testing 16 stones could not eliminate this possibility.

EGL graded diamonds are currently offered within the trade at 9% - 15% lower than the same grade GIA-GTL stones.

I''ve seen cases of stones trading at 30%+ less with EGL reports as compared to GIA- again ,primarily in cases of higher priced, larger diamonds.

The study takes a good step in the type of education which benefits the consumer and the trade- it was conducting using a good method for the stones tested. If it was done with a broader cross section of diamonds , in a wider variety of shapes colors and sizes, it could give a more balanced veiw.
I''d also like to re- sbmit the same diamond to each lab a number of times blind- and see if each lab gives it the same grade every time.
I was never trying to invalidate the value of the study- only to put it in perspective

 

[Garry H (Cut Nut)]

Date: 10/21/2005 3:20:11 AM
Author: diamondsbylauren

The lab grades did however confirm some of the market myths, such as EGL USA color grades can be softer and AGSL clarity grades can be stricter than GIA-GTL. However, we found no support for reports of EGL USA color grading being more than one grade different to the other labs. In fact all lab grades were within a single grade of difference for color or clarity.

I have seen cases of EGL stones to be two grades off GIA - based on my own observations. It is very rare , but it does happen on both color and clarity. Testing 16 stones could not eliminate this possibility.David was this EGL or EGL-USA? And very rare might not be a statistically significant issue anyways.

EGL graded diamonds are currently offered within the trade at 9% - 15% lower than the same grade GIA-GTL stones.

I''ve seen cases of stones trading at 30%+ less with EGL reports as compared to GIA- again ,primarily in cases of higher priced, larger diamonds. David was this EGL or EGL-USA? And please remeber that Leonid did not just make up these numbers - they are based on listed prices of hundreds or even thousands of stones with the same table size and depth %''s data for the individual diamonds.
So this is not a stone here or a stone there - and it was a factual real stones offered for sale and focused on the size and color range that we judged to be most applicable to the consumers that we are acting as advocates for. You have mentioned eg''s of big and rare stones etc - we are not considereing such goods for the reasons just given.

The study takes a good step in the type of education which benefits the consumer and the trade- it was conducting using a good method for the stones tested. If it was done with a broader cross section of diamonds , in a wider variety of shapes colors and sizes, it could give a more balanced veiw. we can use the same tight statistical controls with fancy shapes - as you know there are too many variables - and we did the most interesting sizes for the common requests and stones we see removed (ie sold).
I''d also like to re- sbmit the same diamond to each lab a number of times blind- and see if each lab gives it the same grade every time. If you read the report thoroughly you will see this happened by accident with stone 17 - it was sent to GIA again by clerical mistake and got a different clarity grade. Bill Boyajian was good enough to pull the data and found that on both occasions they noted it was a border line call - the vendor concurred.
I was never trying to invalidate the value of the study- only to put it in perspective
with the help of the vendors and loans of their stones, this survey, we believe the largest ever publicly reported, was conducted entirely at Pricescopes expense. Sure we would like to send 2,000 stones, and haggle on each one - resubmit them to same lab in different countries etc etc - but the shipping, insurance and lab fees, time etc are prohibitive.

So unless you or someone else wants to do better.......