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...
Synthetic diamonds.
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...
This Market Is as Strong as Ever
For the past seven years, consulting firm Bain & Co. has done an annual study on the diamond market.
Two years ago, Bain's report said that a 1 to 2% decline in the annual supply of rough diamonds should be expected over the next 14 years.
Production has remained flat, so this year's forecast is little changed.
Stunning: New innovation will be like "adding twin turbos to the Bitcoin engine" - and could send its price to $100,000. Learn more...
Canadian and South African supplies grew... but they were netted out by decreases from Russia and Zimbabwe.
However, from the demand side, the picture is quite different. Bain & Co. expects demand for rough diamonds to grow from 1 to 4% over the next 12 years.
Improving economies and higher disposable incomes are helping to boost consumption in America and Asia, especially China and India.
Diamond analyst Paul Zimnisky believes diamond prices can rise by 10% through 2021 based on limited supplies and a continuation of current demand.
The Industry Is Cleaning Up Its Act
Social responsibility continues to drive the diamond market. The 2006 movie Blood Diamond raised the industry's self-consciousness and helped spur efforts to improve an ethical and environmental approach.
Over time, the diamond industry has established voluntary standards meant to apply to the entire chain, starting with mining all the way up to retailing. As a result, the Code of Practices Certification by the Responsible Jewelry Council has emerged.
"Millionaire Maker": A potential upgrade taking place behind the scenes could send the Bitcoin price to unprecedented highs. Few people even know about this game changer. Click here to learn how you could make millions...
High profile companies, like Tiffany & Co. (NYSE: TIF), even develop their own efforts toward protecting the environment.
According to some of the top jewelry designers, diamonds for engagement rings are as popular as ever.
What's more, any and all shapes are sizes are "in," although marquise, pear, and trillion cuts are gaining favor.
Others say that customers are becoming more audacious, looking at non-traditional cuts and even moving into some colored diamond options. And some buyers are even partial to vintage or antique designs and mixed metals as well as gemstone-diamond combinations.
More importantly, all of this bent toward creativity means the demand for natural diamonds is alive and well, contributing to their desirability and therefore price.
So here's a high-risk but potentially high-reward way to get in on the potential of the diamond market.
The Risk Is High, but the Potential Payoff Is Extreme
First consider that this diamond sector play is not for the faint of heart.
It's a nano-cap company that lives by the drill bit... or dies by the drill bit, subject to big swings depending on success or failure.
That said, I still think a small allocation allows for valuable exposure to a sector that can provide some outsized gains to a portfolio.
I view this company as a call option on the natural diamond sector with no expiry date.
Dunnedin Ventures Inc. (TSXV: DVI) trades on the Toronto Venture Exchange. At $16.27 million, it qualifies as a nano cap, but its main project, Kahuna, looks very promising.
The Kahuna Diamond Project is located up in Nunavut territory in Canada's north.
Kahuna already boasts a maiden Inferred Resource released in 2015, containing just over 4 million carats of macro-diamonds, averaging 1.01 carats per metric ton grade. Kimberlites are exposed at surface and open along strike and at depth.
In its favor, Kahuna is located near Agnico Eagle Mines Ltd.'s (NYSE: AEM) Meliadine property (mine under construction), which has an all-weather road.
Mining Hall of Famer Chuck Fipke, who discovered the well-known Ekati Diamond mine, owns 12% of Dunnedin and currently drives the company's exploration.
And another legendary shareholder is Rob McEwen, founder and former chair and CEO of Goldcorp and current chair and CEO of McEwen Mining. He owns 5% of Dunnedin.
The company is ably managed by president and director Claudia Tornquist. She's a former general manager at Rio Tinto, in particular its Canadian and Australian diamond operations.
So far in 2018, Dunnedin has managed to extend two of its diamond-bearing kimberlite dikes, discover a new kimberlite pipe, and show the effectiveness of its methods to identify new kimberlites through at-surface diamond indicator minerals.
Its summer drill program consisting of 40 targets is ongoing and should provide consistent news flow.
There's still plenty of risk in this kind of diamond play, especially as it's still in the early days of the exploration phase.
The bottom line is this, though: Dunnedin appears to have all the right ingredients to bring its discoveries to the next, wildly lucrative level. Early investors could see multiples of their original stake as the company succeeds.
See Why Bitcoin Is Far from Dead (and How It Could Make You a Millionaire)
At our recent Bitcoin 20x Summit, we uncovered information that left many folks stunned - and re-evaluating everything they thought they knew about the crypto market.
You see, while Wall Street and Fortune 500 companies continue to badmouth Bitcoin, they're diving headfirst into this craze... and I'd bet not one in 10,000 people know the reason behind it.
Go here to see why Bitcoin's not dead... and how it could make you millions.