United States Patent Application 20090248591 Kind Code A1 Feldman; Victor David ; et al. October 1, 2009
GLOBAL INVESTMENT GRADE FOR NATURAL AND SYNTHETIC GEMS USED IN FINANCIAL INVESTMENTS AND COMMERCIAL TRADING AND METHOD OF CREATING STANDARDIZED BASKETS OF GEMS TO BE USED IN FINANCIAL AND COMMERCIAL PRODUCTS
From Jason Zweig at the WSJ's Total Return blog:
From the list of assets that haven’t yet been turned into exchange-traded funds, you can strike another one: diamonds.
Today, GemShares, a Chicago-based financial firm, is expected to secure a U.S. patent for its process of turning diamonds into tradable securities.
Diamonds and other precious stones are a sizable part of many people’s fortunes; a recent survey by Barclays Wealth found that 70% of rich investors around the world own precious jewelry, up from 57% five years ago. On average, they have 5% of their assets there – equal to their stake in gold.
But diamonds are idiosyncratic. They vary on the famous “four Cs” of carat, color, clarity and cut. Each dealer may put a different price on the same stone. The gap between what a dealer will pay to buy a stone and what he or she will charge to sell it can be wide, and an important diamond can take years to sell.
In short, one of the hardest substances known to man is also one of the least liquid. “Everyone knows the price of gold,” says Andrew Feldman, a financial adviser who helped develop GemShares. “No one can tell you what the price of diamonds is: Each one is unique unto itself.”...MORE