We had a great turn-out in a very difficult economy for our 2009 ASA Conference G&J program. It was a treat to see many friends that we usually meet only on-line.

To start things off, Juanita Addeo, ASA lined up a great meal (at an insider price) where many of the G&J folks and speakers met for a fun evening together. Individual members “adopted” speakers and guests and paid for their meals. The speakers were delighted to be invited to the dinner, and touched by having been adopted. We all formed personal connections with the speakers that enhanced the whole tone of the presentations.

We had excellent speakers, with AGS Education Services Manager Patrick Stout leading off with specific information on how to evaluate super-ideal cut diamonds, and the ways that diamond cutters can “fudge”.

This was followed by Master Diamond Cutter Philip Van Emmenis and his son Tertias, who set up a diamond cutting wheel right in the room and explained the difficulties the cutter must deal with to fulfill the parameter of super-ideal cuts. Furthermore, anyone interested was allowed to take a turn at the wheel and put a facet on a diamond!

Estate jewelry dealer Jonathan Siegel gave us the view of the secondary jewelry market from the dealer’s perspective, and gave us a chart showing the discounts from the Rap sheet that he was currently using to purchase diamond in the resale market.

Next we had an update by Stan Hogrebe and the Dazor team on the problems created by the major research labs using unfiltered UV-emitting tubes in their grading boxes. He presented charts and data demonstrating the possible change in the diamond color grade depending on whether it is the true body color or the fluorescent color that is being observed. We also inspected a prototype color grading box that Dazor has developed specifically to handle this problem. Dazor also set up a vendor booth, where the “SpeckFinder” drew a lot of attention from members of all disciplines.

Conch pearl expert Manuel Marcial de Gomar entranced us with his presentation on Queen Conch Pearls, and gave each of us a pearl color nomenclature chart that he has developed. Manuel instructed us on the nuances of grading these rare and fabulous treasures from the sea. (See Terri Brossmer’s article below.)

Always a favorite, Joe Tenhagen updated us with the latest data on the structure of the 16 stratified retail markets that he has identified. He named the major player at each level, and brought us up-to-date on firms that have closed or gone through bankruptcy due to the economy.

Gemologist Frank Circelli, founder and CEO of “Gem Shopping Network” (on cable and dish) where he sells natural gems and high-end jewelry, mostly one-of-a-kind or limited production. Frank informed us that his was the first gem-chopping network, and certainly a contrast to HSN and other more recent mass-merchandising jewelry networks.

To polish off the program, watch expert and author Ken Specht (The Specht Sheet) brought us up-to date on the nuances of a wide selection of high-end watches, and how the market reacts to each of them.

I urge all members to make an extreme effort to attend the G&J ASA conferences. You will earn a good number of reaccreditation hours, network with friends and colleagues, and gain a wide range of knowledge. It is also the one time when you can experience the multi-disciplinary nature of ASA and get to know Headquarters staff. If you have time, come a day or two early and attend the Board of Governors’ meetings and see how ASA business gets done. Who knows, you may decide to get involved at a higher level!

See photos from Conference at the end of the newsletter. If you’d like to see all 88 photos, they are posted on my Facebook page under “Images” (my Facebook user name is Nancy.Stacy)

The hand-outs from the conference will be posted on the new G&J website, which is now under construction.

Queen Conch Pearls

By Terri Brosmer

I am convinced that someday a “flame-bearing” “Silk Rose” conch pearl will come into my laboratory for identification and valuation. When that happens, I’ll know just who to contact for the highest level of expertise on Conch Pearls.

Manuel Marcial fascinated us with tales of his early years, growing up and coming of age on the islands of the Atlantic known as the Spanish Main. The area encompasses the southern coast of Florida, Cuba, The Bahamas, Jamaica, Puerto Rico, the eastern coast of Central America, and the northern coasts of Colombia and Venezuela. Since his teenage years, Marcial has been collecting, harvesting, and dealing in Conch Pearls. According to Manuel, his first experience with Conch Pearls occurred in 1959 when he was approached by a local fisherman, off the coast of Colombia, who offered to trade him a conch pearl for his entire day’s catch of six lobsters. Marcial knew nothing about Conch Pearls at the time but was captivated by the beautiful pink color and flames and agreed to the trade. Some years later, Marcial, now a knowledgeable collector and established Emerald dealer sold the 2.88ct Conch Pearl for $5000.00. Today the prices of Conch Pearls range from several hundred to tens of thousands of dollars per carat.

Conch Pearls were first used in jewelry during the mid-19^th century. References to the “pink pearls” have been recorded as early as 1857. The naturalistic motif and soft color palette of the Edwardian and Art Nouveau periods were a perfect match for the Conch Pearls. Their great demand and popularity continued in both European and American high society until World War I when styles and fashion changed to a much bolder, heavier, mechanical look. It was not until the 1980’s that resurgence in the demand for Conch Pearls began. The jewelry-buying public remains largely unfamiliar with the Conch Pearl to this day. They remain a connoisseur’s gemstone.

Conch Pearls are not considered true pearls by some, including the Gemological Institute of America, since they are a calcareous concretion produced by a univalve, namely Strombus Gigas or Queen Conch, instead of layered nacre produced by a bivalve. Rarer than almost any other pearl, by most estimates, the Queen Conch produces one pearl in every ten to fifteen thousand shells. The pearls range from spherical to oblong to very baroque shapes. During the hands-on portion of the lecture we witnessed some of the more unusual shaped Conch pearls, given names that included “man” and “woman”.

The pearls occur in every color of a Caribbean Sunset. Marcial has developed a color master chart that describes the basic hues. The chart includes “Silk Rose, Saturn, and Snow” to name a few. Copies of the chart were distributed to the students in attendance.

The most highly prized conch pearls exhibit the classic “flame structure” or fire as “rivers of light” or “moiré’ silk” nearing chatoyancy. We found on examination, that with some effort, small areas of flame structure were visible on every specimen. Recognizing the flame structure and distinguishing it from the curved, linear growth structure of the Conch shell are important in identifying a genuine conch pearl. Documents detailing polished shells sold as Conch Pearls can be found

According to Manuel, attempts to grow cultured conch pearls are currently underway, but without much success. He warned that as gemologists and appraisers, we should be much more concerned with fakes and frauds than natural vs. cultured. The inside of the Queen Conch shell exhibits the same colors as the conch pearls and is regularly cut and polished and sold to the unsuspecting buyer as a natural conch pearl.

The rise in popularity and the demand for conch pearls combined with the excessive demand for the conch meat has resulted in over-fishing of the conch shell beds and near extinction of conchs in some areas. All conch pearls must be accompanied by a CITES certificate when purchased, to insure that the pearl was harvested from protected beds and sold through legitimate channels. Strombus Gigas is listed as a specially protected species in Appendix 2 of CITES. CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora) is an international agreement between governments. Its aim is to ensure that international trade in specimens of wild animals and plants does not threaten their survival. Mr. Marcial added that some of the Caribbean countries are notorious for over-fishing and do not adhere to CITES.

Manuel informed us that an important consideration in describing and valuing a conch pearl is whether or not the pearl has been drilled. Drilling a conch pearl devalues it, sometimes as much as 40%. The best conch pearl mountings are those that hold and protect the pearl without a post and/or epoxy. It would also be wise to include in any appraisal or quality analysis report that prolonged exposure to sunlight will fade the color of the Conch Pearl.

It is easy to understand why those who have seen and handled one of these magnificent creations of nature find themselves forever searching for one to call their own.

Manuel Marcial contact information: www.emeraldsinternational.com

More information on CITES www.cites.org

Report from the Chair & Governor

By Gary Smith

With great expectancy we look forward to 2010, as a year of positive growth and change. 2009 was one of the most difficult years in the past memory of the majority of people that I have spoken with. Our Discipline deals, for the most part, with Luxury items that have plummeted in sales. If it were not for dissolution's, forced liquidations, and bankruptcy, many appraisers would be extremely hard pressed for work. There are geographic areas that are not as affected as others, but overall we are facing a global time of recession. Some of the appraisers’ workload is off by 40% or more. So now what?

One of the great aspects of ASA is its resiliency - we will rebound and be better than ever!

2010 should be a time for reflection, change, and preparation for growth. We must examine our past business practices and learn from our mistakes. We must change what has not been productive, and prepare ourselves through continued education, networking, streamlining of business practices, and finding a positive attitude.

In this past year we have seen many changes at headquarters, starting with the implementing of a new computer system.

Our old system had several patched up servers, which could not communicate with each other, and architecture, which was outdated. The decision was made through BOG to invest in a new (from the ground up), state of the art system from APTIFY. It is now 90% implemented, with the end in sight. It will allow for better, cost controls, accounting, and data base sharing. We look forward to its total completion.

The Executive VP, Laurie Saunders resigned for personal reasons, and was replaced by Jane Grimm. Other staff positions were eliminated for economic reasons, so HQ is endeavoring to do more with less. A Task Force was initiated to examine the feasibility of a possible Headquarters move. The existing lease is in effect until 2011, and the landlord is unwilling to decrease the amount, so they are examining the possibility of moving within the D.C. area, or even relocation to another city or state. Nothing definite yet, but I will monitor the situation.

Gems and Jewelry is now ready to inaugurate its Virtual Chapter. The impetus behind forming a virtual chapter was to have a method, which would allow members who are geographically segregated to have the same "Chapter" benefits as someone from a larger metropolis. The dues would be less, because no physical meeting place, food, or overhead (brick and mortar) is involved. The members have the option of maintaining their current membership in their local chapter at the same time, and to avail themselves of their benefits as well. By our web presence, it would give us the ability to conduct meetings at specific times, without the travel times (less out of office time) and be more efficient. We can use pre-recorded teaching webinar's that the members could access at their convenience and keep current on gemological / appraisal / or other topics. It would also serve as an outreach medium to other appraisers.

A Constitutional Bylaw Committee was formed to review ASA's existing bylaws and give recommendations for their updating, and remove any redundant material. It is a relatively new committee, so there isn't much to report yet.

Finally: Orlando Conference was in my estimation one of the best I have ever attended! The weather was horrible, but the classes surely made up for it. It was one of the most diverse and interesting I have ever attended. For those who missed it, you will be hard pressed to duplicate it. From diamond cutting to Conch pearls and Dazor Lighting who was a sponsor, it was impressive.

In Your Service,

Gary L. Smith, Forensic Gemologist™

G&J Discipline Chair

G&J Board of Governors

G.G., A.G.S.-C.G.A., A.G.A.-A.S.G., A.S.A.

Master Gemologist Appraiser®

Upcoming Events

Efficient Gemology: Tips, Tricks & Working on a Shoestring Budget: AGA Tucson Conference & Gala Dinner Dance; Wednesday, February 3, 2010 Register now!

Spring G&J Committee Meeting: Tucson, Thursday 2:30 Feb 4^th, 2010. Meet under the front portico at AGTA at 2:30 to car-pool to the Starr Pass Golf Suites. All members are welcome. Click for Directions

GJ 206: at AGS Lab, to be determined

GJ 205: 2009, July or August, to be determined

ASA 2010 Conference: July 25-28 JW Marriott Resort & Spa, Las Vegas, NV
We will have a great program including a heavy-duty narrative appraisal writing session, updates from the AGS lab, finding and adjusting comps, gem treatments, antique jewelry and diamond update. We’ll let you know when the program is finalized. Mark your calendar!

Good Changes in USPAP Re accreditation!

The Admissions Committee of the Appraisal Foundation has approved ASA’s request to allow the American Society of Appraisers’ Business Valuation,

Gems and Jewelry, Machine and Technical Specialties, and Personal Property appraisers subject to USPAP the following options for meeting USPAP continuing education requirements:

• Successful completion of the 15-Hour National USPAP Course and pass the associated 15-Hour National USPAP

Course Examination every five calendar years, or

• Successful completion of the 7-Hour National USPAP Update Course every two calendar years, or

• Successful completion of a 7-Hour National USPAP Update Course specific to Business Valuation, Gems and Jewelry, Machine and Technical Specialties, or Personal Property every two calendar years. A 7-Hour discipline specific USPAP Course will need approval from the AQB Course Approval Program.

This approval is effective immediately and will remain in effect until the AQB adopts new Personal Property Appraiser Qualification Criteria or The Appraisal Foundation Board of Trustees adopts new Criteria for Appraisal Sponsorship.

Estate Jewelry – Asset or Investment?

By Scott Gordon, GJ, ASA Master Gemologist Appraiser

Recently I ran across a back episode of Consuelo Mack’s Wealthtrack, which airs on public television that compared stocks and bonds, charitable contributions and fine estate jewelry as aspects of “broad diversification” in “asset classes.” The voiceover announcement at the start of this program invited the listener to learn “how to invest like a professional in your portfolio, your philanthropy, and your jewelry.”

One of the guests spoke of comprising the modern portfolio with “fixed income, also with equities, but you also want to do it if you can with hedge funds, with commodities, natural resources, real estate, precious metals, collectibles…” “Gold, jewelry, right,” chimed the hostess.

At the same time, I had occasion to study 2008’s World Wealth Report, published by Merrill Lynch and CapGemini, which examines Forbes Cost of Living Extremely Well Index. This report breaks down expenditures among High Net Worth Individuals for “investments of passion,” a list including, in order, luxury collectibles (private jets, yachts, and high-end automobiles and motorcycles); fine art; jewelry; luxury/experiential travel; as well as others, including sports investments and other collectibles (coins, wine, antiques, etc.).

So the question arises: in what sense are gems and jewelry an investment? Most of us probably agree that it is an asset, as we recall the old GIA course language that assured us that diamond has “a universal security value greater than any other commodity.” But, at least ever since the Canadian boiler room scams of the early 1980’s, we’ve been taught to recoil at presenting them as investment vehicles.

Even with an improved stock market, the public might well ask if an Art Deco diamond bracelet or a Kashmir sapphire has held its value better than shares of General Motors. As appraisers, how could we frame an answer? We know that in uncertain times money flees into harder assets. But what would be the means of comparing fine gems or estate jewelry with other potential vehicles for the preservation and growth of wealth?

First, some definitions might help. Historically, we have been taught that gems and jewelry fall into the category of personal property, which is marketable, non-investment property, or what has been called “consumption” goods, as opposed to “production” goods, or those things that produce other things: a factory is “production goods,” while a chair is “consumption goods.” As such, the former depreciates in value, while the latter, if it is of such desirability that the market creates it, may do the opposite – appreciate in value – as might be the case with an antique chair of a certain quality.

So, how would we compare an Art Deco bracelet to a more conventional investment? I spoke with Roy Morris, FASA, a former ASA President (and a real estate appraiser in Arizona), for a better understanding. Would the income approach, which, of the three approaches to value, is considered terra incognita to most personal property appraisers, possibly apply? No, because this approach depends fundamentally on the presence of an income stream, whether steady and continuous or not, to establish the “present worth of future benefits,” as determined by a capitalization rate. This rate tells us how quickly an investment pays for itself; for example a “cap rate” of 20% means that one hundred percent is paid for in five years.

But, Morris explained, the value of the Art Deco bracelet is based on its potential appreciation, as would be determined (after appropriate adjustment for inflation) by such market data as auction results. If we could ascertain that a similar bracelet, bought ten years ago for $10,000, sold five years later for $15,000 (an event known as “reversion,”) we would have an appreciation of $5,000 over five years, or an annual rate of return of $1,000, or ten percent. This rate of return would give us the means to compare the bracelet as a potential investment with some other possibility. But we wouldn’t be using the income approach, but instead it would be the sales comparison approach.

When I asked Morris if certain gems and jewelry could ever be considered an investment, he answered yes. “This is where the art element of it gets involved,” he said, as well as the “amenity value,” a concept he defined as “non-dollar measureable attractiveness.”

This may mean that our understanding of what an investment really is depends highly on context, whether we are using the word as appraisal industry argot or in some other broader way to mean a store of real wealth. In any event, we are living in interesting times, as the Chinese curse says, the best response to which is to question our old notions of how to appraise.

Tech Tips

Sign Up Now for ASA Forums!

Our G&J Discussion list has been a great success since 2001, when we were one of the very first ASA discussion lists. Now we have an added capability to have discussion forums right on the ASA Website! You can have the forum content delivered to you in “Real Time” or once a day as a Digest. I’ve just tried it out, and it’s easy!

I suggest you log on to ASA. Once “For Members” pops up on the menu bar, hover your cursor over it and choose “Growing Professionally” and then “View Forums”. You’ll see all the forums to which you have access. Then click this link to the easy-to-follow User Guide.

Managing Discussion Lists and Forums

Make a Separate Folder for Forums & Discussion Lists

For anyone annoyed by too many messages from ASA or any other discussion list, you might have the option to create a special folder to collect all of a certain type of message.

I use Outlook, but most email programs probably have similar capabilities if you look for them.

In Outlook, you would first create a sub-folder in the Inbox titled something like "G&J DISCUSSION".

Be sure you have a “Contact” for the discussion list (email address: gj-discussion@list.appraisers.org )

Next select "Tools" then "Rules and Alerts". Choose the tab "E-mail Rules" and “New Rule.

Under Step 1 under "Stay Organized" choose "Move messages sent to a distribution list to a folder" and under Step 2 click on "people or distribution list and browse to however you have labeled the contact for "gj-discussion@list.appraisers.org " on your Contacts list, and then click on "specified" and browse to the G&J DISCUSSION folder you just made under the Inbox folder. Follow the prompts and check the boxes “Run this rule now on messages . . .” and “Turn on this rule” then Enter until you get to FINISH and you will be all set up.

All G&J Discussion messages will be in the new folder, to be read at your leisure and will no longer interfere with your daily business.

Alternately, you can choose to make a file based on Step 1 “Move messages with specific words in the subject to a folder”. In Step 2 enter “gj-discussion” and browsed to the G&J DISCUSSION folder and enter. Check the two boxes and “Finish”.

I expect that other mail programs also have a way to make folders for designated messages, but you would need to go to your "Help" link to get the specific method.

I hope this solved the problem for at least some of you.

ETIQUETTE: Remember that when you “Reply” to someone on the list (even though you don’t hit “Reply to All), it still goes out to everyone!

Try to restrain yourself from “one-liners”, wise-cracks and thank-you’s. To send those privately, you can copy the sender’s name from the “From” line, open a NEW message (not “Reply”) and past in the individual’s name.

Do You Have These Books?

Review by Carole Richbourg, ASA

Narrative Appraisal Report Writing by Roger Durkin, J.D., M.S., SPA, ASA
Price $35

Even if you don’t plan on delving into the world of litigation, every report that you write should be done as if you were planning to defend it in court. According to Roger P. Durkin, Esq. of Durkin Valuation Consultants, too many appraisers do not prepare reports that are relevant and easily understood by the public as well as the court.

Roger not only illustrates how to write the narrative, but how to select “evidence” for the appraisal, apply reasoning, and frames the appraisal “argument” essentially, to produce a credible report.

He goes on to examine methodology, theory and practice, and then sets out the several Standards of Practice applicable to the various appraisal disciplines and environments.

Next he goes deeper into the subject of evidence and burden of proof, focusing on supporting a claim of value with various types of “warrants” that will be persuasive to the reader. After a review of the importance of grammar and form, Roger concludes with an extensive section on appraisal review: of your own appraisal or that of others.

I found Roger’s writing style refreshing; he isn’t afraid to ‘rock the boat’ and implores the reader to beware of “Appraisal Dogma” that festers in all of the appraisal organizations. The book is easy to navigate, is packed with common sense and encourages the reader to think for themselves.

I have already re-written several portions of my appraisal narrative, and it is definitely worth your time to pick up this book and take a look at yours!

In my opinion, all appraisers will benefit from reading this book, and the more advanced the appraiser, the more valuable it is apt to be.

Review by Nancy Stacy, ASA

The Appraiser as Expert Witness by Roger Durkin, J.D., M.S., SPA, ASA

This is the book that CA Supervising Judge Richard Livermore read and praised; though I believe he would have had equal praise for Narrative Report Writing had he received a copy. Even seasoned expert witnesses will appreciate having this compendium of the appraiser’s role in the judicial setting, the differences the appraiser will encounter in various courts, and a concise review of the elements of a law suit. I especially appreciate having an organized presentation of many of the most relevant Rules of Procedure, with references cited, and a detailed examination of 17 landmark appellate cases pertaining to appraisal practice—all in one place.

The last chapter lays out some valuable tips on marketing your practice as an expert witness. The book includes a glossary and index, which I always appreciate!

Special offer from Roger: Send a check to Roger Durkin, ASA directly at 234 Lewis Wharf, Boston, MA 02110 and he will arrange for both books to be sent to you for $46, including shipping. Otherwise, you can order a single book from www.professionalappraisers.org at $30 to $40 each.

Website to Visit

In memoriam, Jeff Graham

Thanks to Blaire Beavers for letting us know of Jeff’s passing:

Jeff Graham’s Advice on Buying Rough in Tucson

Jeff passed away in the summer of 2009. He was an incredibly skilled cutter. His website, which is still up, has some very insightful advice on a number of gem topics.

http://www.faceters.com/askjeff/answer37.shtml

For advice to servicemen buying gems in Afghanistan: http://www.faceters.com/askjeff/answer118.shtml

Check around his site while it is still up. He developed some amazing cuts, and has some very frank buying advice for servicemen, the public and cutters as well.

Committee Members

Officers

Chair: Gary Smith, GG, ASA Master Gemologist Appraiser

Vice Chair: Mary Reich, GG, ASA Master Gemologist Appraiser

Secretary: Marti Hubbard, GG, ASA Master Gemologist Appraiser

Treasurer: Christine York, GG, ASA Master Gemologist Appraiser

Board Members

Vickie Adams, GG, ASA Master Gemologist Appraiser

Tracy Aros, GG, ASA Master Gemologist Appraiser

David Bowie, GG, ASA

Monica Caldwell, GG, ASA Master Gemologist Appraiser

Susan Eisen GG, ASA Master Gemologist Appraiser

Teri Newman-Brossmer, GG, ASA Master Gemologist Appraiser

Carole Richbourg, GG, ASA Master Gemologist Appraiser

Nancy Stacy, GG, ASA Master Gemologist Appraiser

Appointed Board Members

Mona Miller, GG, ASA Master Gemologist Appraiser

GJ Governors:

Jennifer Thornton-Davis, GG, ASA Master Gemologist Appraiser

Gary Smith, GG, ASA Master Gemologist Appraiser

Committee Minutes

The minutes will be posted on the new ASA-G&J website as soon as we have the capability. We will also post the hand-outs and PPT presentation on super-ideal cut diamonds.