Tiffany vs. Costco: Which Diamond Ring Is Better? – Bloomberg Businesswekk 05-06-13

Salient to Investors:

Costco’s “Tiffany” engagement rings have nothing to do with the New York jewelry store, who is now fighting Costco in a multimillion-dollar trademark suit.

In 2005, Good Morning America appraised a $16,600 Tiffany at $10,500 and a $6,600 Costco “Tiffany” at $8,000.

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Bond Investor Gundlach Buys Stocks, Sees ‘Kaboom’ Ahead – Bloomberg 11-29-12

Salient to Investors:

Jeffrey Gundlach at DoubleLine Capital says:

  • The first phase of the coming debacle was the 27-year buildup of corporate, personal and sovereign debt to 2008.
  • The third phase will be deeply indebted countries and companies defaulting sometime after 2013.
  • Buy gemstones, art and commercial real estate and other hard assets.
  • Chinese companies, US natural gas producers and gold-miners are bargains.
  • His Total Return Bond Fund is 78 percent in low duration residential mortgage-backed securities including the low duration nonguaranteeds, which Philip Barach at DoubleLine said would have few defaults if higher interest rates meant the economy was improving and housing prices recovering. Sarah Bush at Morningstar cautioned on July 18 about the use of volatile mortgage-backed derivatives such as inverse floaters.
  • No country will default in 2013. However, Japan is running out of policy tools.
  • Inflation could rise by 2 percent if the Fed buys more government debt.
  • Obama will not be able to reach an accord with Congress to make significant cuts in the deficit. Tax hikes on the wealthy won’t bring in enough to have a significant impact and politicians won’t cut entitlement programs much because the public overwhelmingly supports them.
  • There will be no grand compromise on the fiscal cliff if an agreement isn’t reached by January, so expects politicians to push the deficit issues into 2013 and beyond. Obama won’t give on anything, and the Republicans won’t roll over.
  • There are opportunities in emerging-markets equities, particularly in China.
  • Demographics in some emerging markets will support their sustained growth. Developed nations will have fewer than 3 workers for every retiree by 2025 versus 6 to 7 for Brazil, India and Mexico.
  • US companies don’t have much potential for growth.
  • Gold-miners and natural gas producers are cheap.
  • Apple will struggle to reach its earnings potential without an innovator like Steve Jobs at the helm.
  • Investing in natural gas is similar to buying gold in 1997.

Jeffrey Sherman at DoubleLine said Chinese stocks make up the majority of the 6.7% of international equity holdings in his fund.

Luz Padilla at DoubleLine said the only reason asset prices are up is because of all the liquidity in the system, but this could turn very quickly.

Larry Fink at BlackRock says the US banking system is in good shape and the large supply of natural gas in the US will create jobs, and is long-term very bullish on the US.

Richard Pildes at NYU said the constitutionality of Congress creating independent agencies like the Fed has been long settled.

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Diamond Brings Record $21.5 Million, Beatles Art $87,720 – Bloomberg 11-13-12

Salient to Investors:

The Archduke Joseph Diamond sold for $282,545 per carat, a record for a colorless stone.

Geoffrey Munn at Wartski said the best diamonds have become extraordinarily valuable – there’s a scramble to buy jewels as a hedge. Munn said colored diamonds, which have set the highest auction prices, are rarer and more popular.

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Next Marilyn Sought to Sell Emeralds Over Diamonds: Commodities – Bloomberg 11-01-12

Salient to Investors:

Emeralds are rarer than diamonds but cheaper. IDMA said at current growth rates, emeralds could take more than 20 percent of diamonds’ market share within two decades.

Red, green and blue stones comprise just 10 percent of global gem sales and lack standardized pricing.  The colored gem market was equal in size with the diamond industry in the 1940s.

High-quality emerald prices have increased more than 10-fold in the past three years versus a 21 percent gain in diamonds.

Jeweler Richard Campbell said colored stones are mainly bought by more experienced customers who already have diamond pieces.

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