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Apparently diamonds really aren't forever.
Although De Beers is known for its wildly successful "A Diamond Is Forever" campaign, the truth is the company helped create a market that it nearly monopolized.
But over time, supply from other diamond miners added considerably to supply, eventually contributing to a decrease in the value of De Beers' own stockpile.
Then technologies advanced to the point where artificial diamonds could be produced in a lab, further eroding the company's stranglehold.
After cornering – then dominating – the natural diamonds market for some eighty years, De Beers has now set its sights on a somewhat less precious sector of the market…
The company recently announced it would enter the retail synthetic diamond business, offering these in the fashion jewelry category. Its Lightbox Jewelry brand promises to undercut prices by at least 25%, severely damaging the competition's profits.
On its surface, that would seem to be where the opportunity lies, but synthetics are a bit of a red herring for investors.
You see, natural diamonds are exceedingly difficult to find in economically viable deposits. And yet demand continues to grow as supply is expected to shrink.
So the prospects for profits remain in the natural diamond market, with fundamentals pointing to higher prices.
Thanks in large part to a swelling Asian middle class, the outlook for this industry is highly promising.
And the natural diamond business can be extremely lucrative for investors with the right angle…
About the Author
Peter Krauth is the Resource Specialist for Money Map Press and has contributed some of the most popular and highly regarded investing articles on Money Morning. Peter is headquartered in resource-rich Canada, but he travels around the world to dig up the very best profit opportunity, whether it's in gold, silver, oil, coal, or even potash.