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Conference nyoss1::market_investing

Title:	Market Investing

Moderator:	2155::michaud

Created:	Thu Jan 23 1992
Last Modified:	Thu Jun 05 1997
Last Successful Update:	Fri Jun 06 1997
Number of topics:	1060
Total number of notes:	10477

42.0. "Investing In Gem Stones Yes or No?" by WFOV12::CERVONE () Wed Feb 05 1992 10:52

    I need help in answering some questions on investing:
    
    I received a call from a broker and he said to invest in "Gem Stones".
    of course this is what he is selling and what he gets paid to sell.
    I've never heard that you could actualy invest in stones and of course
    you get the actual stone with a cirtificate of authentissity.
    
    It was a breif conversation and I had to go to a meeting at the time so
    I asked if he could call me back tommorow which was yesterday. He
    breifly mentioned that they are offering stones at $850 which are
    trading for $12 to 1250 to build a clientell and show that they can
    make you a profit on your investments.
    
    Seems to mee that you can realize a profit right away of about $300) if
    you bought and sold on the same day if what he said is true. I dont follow
    stones like I said I never heard of it.
    
    Any comments would be preciated.
    
    PS: I've been reading this notes file for some time now and I have learned
    a lot obout investing that I am putting to work for myself right now.
    
    Thanks
    Frank

T.R	Title	User	Personal Name	Date	Lines
42.1	Such a deal	TINCUP::HOLME		`Wed Feb 05 1992 11:02`	2
	If that much profit can be made in one day why isn't he doing it instead of spending his time on the phone with you?
42.2		SSBN1::YANKES		`Wed Feb 05 1992 11:33`	17
	Everything I've read about gems say either outright, or by describing their complexity, that investing in them is a lot like investing in coins -- yeah, you can make money but you better _really_ know what you're doing. Its not like buying stock or a chunk of metal: a hundred shares of DEC is a hundred shares of DEC, a 10 ounce bar of gold is a 10 ounce bar of gold. (Minus the small chance of counterfeiting in either case.) No two gems of even the same type and size are the same thing and you've got to know what you're looking for. If you like gems, start out by collecting the cheaper varieties as a hobby to build your knowledge. Once you know what you're doing and don't need these cold-call brokers to "help" you, go for it if you wish. -craig
42.3	sounds like a scam	NHAVEN::FLEMING		`Wed Feb 05 1992 11:51`	20
	I knew someone who fell for a similar scam. It went something like this. A broker offered to sell Mr. X $1000 worth of stones for $700. The broker had them appraised by a certified appraiser for the asking price. Mr. X took the stones to an independent appriaser who valued them at between $800 - $900. Given the asking price it still looked like a good deal. Mr. X bought the stones. He took them to a gem dealer and offered to sell them to him. The dealer offered him $400. Mr. X pulled out the appraisal slip and showed it to the dealer. The dealer replied, yes they are indeed worth $700 - $800 at the retail level. I'm a dealer and I buy at the wholesale price which would be $400. Mr. X leaves and attempts to seek a buyer elsewhere. After considerable effort he finds a buyer. He sells the stones for $425.
42.4	** DON'T BUY GEMSTONES **	VMSDEV::HALLYB	Fish have no concept of fire	`Wed Feb 05 1992 12:36`	13
	For reasons cited before, gemstones are among the worst of all possible investments. Terrible liquidity and huge bid/ask spread. Worse yet, the kind of situation that would cause you to sell your stones "at any price" is also the same situation that would cause that price to be much less than your purchase price. (Remember in the movie "Casablanca" where the jewler is telling the woman "diamonds are a glut on the market, everybody is selling diamonds"?) Yes, you can buy genstones because they look good, kind of like art. But you can buy imitations that look just as good and cost a lot less. John
42.5	Do not invest in Gem Stones	WFOV12::CERVONE		`Thu Feb 06 1992 15:32`	7
	Thanks for the comments they all make a lot of sense and I am not going to invest in gem stones. That was my first inclination anyway. I just dont know a real one from a fake one. How do I know if its real or not when they send it to me other than spending more money on having appraised. Thanks again Frank