Two investment bubbles, 340 years apart, provide living proof of Edmund Burke’s famous observation that those who do not know history are doomed to repeat it. Rough diamond broker and founder and president of N.Rothmann, Nurit Rothmann recounts the history of two remarkably similar speculative bubbles: the spectactular rise and sudden collapse of the tulip market in 1637 and the rough diamond market in the late 1970's and early '80s. Reprinted here by special arrangement.
I don't simply throw diamonds at buyers and pressurize them into buying with all kinds of sales tricks. Buyers have faith in me; everything is on the table and very clear. Integrity is very important to me. Rough needs to be seen and inspected before it can be sold. This is a business that needs a personal touch. You have to create a pleasant atmosphere and give clients the feeling that they will not lose out and that they can make a profit on the goods. [The same need for transparency is true of the industry in general].
Bart De Hantsetters, Chairman of the Syndicate of the Belgian Diamond Industry, discusses the need to embrace the new forces ‘disrupting’ a traditional business like the diamond trade. The ship of innovation is setting sail with or without you, so it is better to get on board – as Antwerp has – and build the new on the foundations of the old.
More than 600 Israeli diamond manufacturers have signed a letter that calls on the bourses to support a decision taken by the World Federation of Diamond Bourses, which is meant to improve transparency in the rough diamond trade. If enforced, it will greatly reduce the level of risk that has for so long been part of the business.
Let’s think for a moment about a game of poker. All those around the table understand that, even though some players may be more talented than others, the mathematical risk is equally distributed.
Nurit Rothmann reflects on what the diamond industry should learn from the master toymaker, why thinking like a fish might help our business, and why recent arrogance should inspire us all to do some soul-searching.