30
Mar 13

A synthetic diamond is forever(tm)

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I proposed to Nora today, and she said yes! I look forward to many, many happy days ahead. But today’s post is not about my engagement, but rather about how I chose an engagement ring. This is a deeply personal choice that people need to make for themselves, and I offer my story only in the hope that it will help out some nameless stranger in the future.

I chose to propose with an engagement ring because I’m sentimental and I thought a ring with a diamond on it was a nice symbol of our commitment to each other. Most importantly, I had intuited that Nora was also ok with it. If she wasn’t, that would be no big deal, and no ring would be offered. Tradition or otherwise, it’s important that your mate is cool with your decision. What I also firmly believe is that there are many ways to express your commitment to your partner, and a ring is just one way, no more or less valid than any other.

Having said that, i was also aware that mined diamonds can be of dubious and bloody origin, and in all cases the cost of production is far lower than the cost to consumers. Bain (consulting, not private equity) created a great report about the global diamond industry which said that a 1 carat diamond that sells for thousands costs no more than $60 to produce. DeBeers, who controls 40% of the world’s diamond production, created the very idea of the diamond engagement ring and coined the phrase “A Diamond is Forever” and the three months salary guideline. The world’s most popular setting is the Tiffany Setting, created in 1886 with virtually no change over more than a century. To give you an idea of how much marketing money is being spent on selling diamonds, simply do a Google search for “Diamond”. There is so much paid inclusion manipulating the results, that the Wikipedia entry for diamonds is near the bottom.

To be honest, I’m not bothered at all by the use of marketing to drive up demand for a product- I would stand on a slippery slope if I refused to buy things that I wanted more because I was exposed to a marketing campaign.  What I am bothered by is the lack of innovation in these industries. Good businesses reinvest their profits into growth and innovation, which is why I decided to buy a synthetic diamond.

Synthetic diamonds are diamonds, but instead of mined by a worker, they are grown in a lab. Industrial synthetic diamonds have existed for many years, but the the process to create them results in colored diamonds, and only recently have colorless diamonds in gem quality become available. Where a mined diamond costs $60 to produce, a colorless lab grown diamond costs upwards of $2500. Despite this, the retail price of a lab grown diamond is still significantly less than a mined diamond of the same quality because of the close to 100x markup on a mined diamond.

For now, there’s a pretty significant floor for breakeven pricing on synthetic diamonds, and the $100 carat is still a long way off. But I have no doubt that the synthetic diamond industry wants to radically reduce the cost of gems. The diamond industry is aware of this, and I expect that millions will be spent to cast synthetic diamonds as something more akin to Cubic Zirconia or Moissanite. They are neither of these things, but real diamonds created by scientists, technicians and engineers who are trying to disrupt an industry that is long overdue for disruption. Like an early Tesla adopter who knows that they are financing the development of better and cheaper future products, I’m happy to spend money on a synthetic diamond of known non-dubious origin.

I bought my synthetic diamond from Gemesis, who sell directly to consumers, and I got a beautiful diamond for about 30% less than what Blue Nile would charge for the same grade. I was gullible and signed up for their mailing list, but instead of spam I got a 10% off coupon, and every little bit helps. The diamond arrived in a nondescript FedEx box with nothing that says “Gemesis” on it- in case you are worried about package interceptions. I told Nora the box was filled with RC car parts, and given the things I buy on eBay, there was nothing suspicious about this at all.

I really do like the look of the Tiffany setting, but Tiffany won’t sell the setting without their diamond on it, so I found a local jeweler who could do an elegant six prong setting in platinum, and Nora and I couldn’t be happier with the outcome. The ring was pretty nice, too, and for $6500 total it was significantly cheaper than a name brand ring with a mined diamond.


27
Mar 13

JD Power is bullshit

Someone recently asked me about JD Power, the company behind the customer satisfaction surveys on just about everything you can buy our use. A part of their business is aggregating user ratings for car dealerships.

In 2003, I bought a Mitsubishi Evolution from Maxwell Mitsubishi in Austin. The transaction went fine, but towards the end my salesman told me that I’d be receiving a survey from JD Power, and if I returned it to them blank, I would get a free oil change. They were gaming the system.

When I got home, I emailed JD Power’s customer service from my personal email to let them know this was happening. A day later I get a phone call from my salesman because JD Power had forwarded my email, name and email address attached to the dealer. This resulted in a confrontation on the phone and a lifelong hatred and distrust for JD Power and Associates.

I would not trust anything they say about anything- as it’s clear from my experience that they are more interested in colluding with companies than they are with actual research.


19
Mar 13

Cool used car #4: 2001-2005 Lexus IS300

When Toyota launched Lexus in 1990, they had their flagship LS and a tarted up Camry called the ES. Nonetheless, for the low, low price of $35K ($62K in today’s dollars) you had a luxury sedan that was paradoxically both technically ambitious and conceptually conservative. It turns out there was a huge market for a luxury car that combined Japanese reliability and technology with German luxury.

By 2000, Lexus had the GS, LS, RX, ES, SC, and LX lines. It had virtually the entire luxury market mapped out, but they didn’t have a 3 series competitor, right when the Audi A4 and BMW 3-series were snapping up australianviagra.com coveted young professionals. Toyota looked at their product portfolio and decided to rebrand the Japanese market Altezza as a Lexus. But where Lexus had a reputation for restrained luxury and comfort, the Altezza was an altogether different beast.

You see, the Altezza’s chief engineer was none other than Nobuaki Katayama, who was also the mastermind behind the RWD Corolla GT-S, also known as the AE86. The AE86 became legendary for its combination of light weight and handling, and was immortalized by the Initial-D manga and anime. With a higher budget than with the Corolla, the Altezza had double wishbones all around, just like the Supra. It also was available with the legendary 2JZ-GE inline six from the Supra. With lots of room in the engine bay any powertrain from the Supra will also fit in an IS.

Unlike other Lexus models, the IS300 was not designed with North America in mind, but instead for Japanese enthusiasts. As a result, the car’s design reflects much of the home market’s tastes in the late 1990’s. The stereo is a straightforward 2DIN design, easily replaced with an aftermarket unit. The pedals are drilled aluminum. The taillights are dipped in chrome and spawned many imitations in the aftermarket. The shifter is a giant chrome ball. And most noticeably, the instrument cluster looks like a Breitling chronometer.

Unlike the E46 BMW, the Lexus IS is a Toyota, and therefore extremely reliable. The engine is overbuilt at the modest 215hp power level. Also unlike any BMW short of an M3, an LSD is available on all model years except for 2005. While the reviews of the time place the IS slightly behind its contemporary BMW, the suspension has more potential and takes well to aftermarket dampers, springs, and sway bars.

If you want an IS, the 2002-2004 models are best, since they have side curtain airbags, and an available five speed manual. 2005 models lost the optional LSD, which was a bargain at $600. Also, from 2002 there is a rare wagon variant, the Sportcross, which was only available with a 5 speed automatic. Automatics drive fine and many well kept examples are easy to find. The LSD option is rare- look in the driver’s door jamb at the sticker with the VIN and manufacturer’s date. If it says B02A, it doesn’t have an LSD. The B02B and B02C variants have LSD. Also, all models with VSC have LSD, but VSC is non defeatable and only available on automatics.

Most of the manual transmission IS300’s I’ve seen have the LSD option, but they also seem more likely to be modified and/or abused. In general I don’t put a lot of value in “never tracked” because my experience tells me that many track drivers are meticulous about maintenance, and you can wear out your car plenty by thrashing your car on public roads without proper care. Still, a 5 speed IS300 with the LSD is the one to get. Navigation is primitive and not worth paying extra for. There are also two optional interiors, a Leather/Alcantara (Ecsaine) combo and a full leather option. The former is much grippier than the latter.

As for pricing in March 2013, good cars seem to range from $10-$15K with the top end getting low mileage cars with all the options. These cars are also modern enough to get the full complement of contemporary safety features and would make for fine daily drivers, so an excellent choice for an enthusiast contemplating the purchase of a Nissan Versa.

In 2006 the IS was updated as a proper Lexus. It gained all the refinement and luxury that it predecessor lacked, but lost the edginess of the original car. It was a huge success. If you’re a fan of small sedans with sports car suspensions, the Lexus IS300 is an unusual example of a Japanese home market car coming to the US with very little lost in translation.