Diamond_README.txt

Diamonds are primarily based on four criteria known as the "Four Cs:" cut, 
color, clarity, and carat weight. In addition to these factors, other less-known
qualifiers (e.g., fluorescence, polish, and symmetry) marginally influence the
value of the stone.

* Cut: In 1919, Marcel Tolkowsky, a young mathematician from a Belgian family of
diamond cutters, proposed a series of diamond proportions that mathematically 
maximized the light refraction characteristics of round-cut diamonds. Known as 
the Tolkowsky cut, it remains as a North American industry benchmark for ideal-cut
round diamonds. The geometric dimensions and proportions in which a diamond is cut
drastically influence a stone's ability to reflect and refract light. For this 
reason, a diamond's cut grade is typically considered the most important value 
driver in the quality of the diamond. These are the diamond cut ratings, in
ascending order: poor, fair, good, very good, ideal, and signature ideal.

* Color: Color in a diamond acts like a filter to block refracted colors from 
incoming light; as a result, the sparkle of the diamond is diminished. Diamonds 
are graded on a letter scale, from Z (noticeable color) to D (absolutely colorless).
Diamonds with color grades of J or better are considered gem-quality, and most 
reputable dealers refrain from selling diamonds below this grade.

* Clarity: Mineral deposits and other imperfections reduce the quality and light
reflection techniques of diamonds; the result is a decrease in value. Gems
that are absolutely free of such blemishes are known to be FL (flawless), 
followed by IF (internally flawless), VVS1 and VVS2 (very, very slight 
inclusions), VS1 and VS2 (very slight inclusions), SI1 and SI2 (slight 
inclusions), and I1, I2, and I3.

* Carat weight: Finally, size is the last prime driver of value in diamond pricing.
A diamond's rarity -- and therefore its price -- increases exponentially with size. 
For example, a two-carat diamond is worth more than twice the value of two one-carat
stones of similar cut, clarity, and color.

* Miscellaneous factors: Most gem-quality diamonds are accompanied by a grading report
from a major gemological laboratory. The American Gemological Society Laboratory (AGSL)
and Gemological Institute of America (GIA) serve as North America's industry leaders. 
A report accompanying a diamond from either of these two labs ensures the quality of
the diamond and potentially increases the value of the stone.

The cut symmetry and surface polish -- both of which affect light reflection/refraction
characteristics -- marginally affect the quality and price of a diamond, because both 
of these characteristics are indirectly considered in cut and clarity. Both symmetry 
and polish are graded using G (good), VG (very good), and EX (excellent) categories. 
The AGSL reports also use an ID (ideal) category.

Diamond pricing standards

The Rapaport Diamond Report (RDR) is published monthly as a diamond wholesale
price list, based on current-market diamond purchases and availability. Used by 
diamond buyers and sellers worldwide, it is the industry standard and the definitive
guide for wholesale gem prices. The values in the RDR are generated through market
activity and are general in nature, dealing primarily in one-quarter carat increments. 
Unfortunately, due to the broad nature of the report, and with tens of thousands of 
unique diamonds available for purchase, no practical method exists to specifically 
predict the wholesale market of a unique stone.