Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.
Speaker 1: I'm Joe Wisenthal and I'm Tracy halliway, uh, Tracy, I
Speaker 1: have an apology. I think I have to make two.
Speaker 1: Oh oh, this is exciting. Okay, go on. Well, you
Speaker 1: know how like I sometimes accuse you of being, um,
Speaker 1: secretly a gold bug and stuff like that, And sometimes
Speaker 1: I like troll you nicely about your dad being a
Speaker 1: gold bug and stuff like that, and being super into
Speaker 1: hoarding physical gold and jewels and gems and stuff like that.
Speaker 1: I'm not sure it's trolling if it's true. In the
Speaker 1: case of my dad, he definitely is a gold bug.
Speaker 1: But what do you what exactly are you apologizing for? No,
Speaker 1: I've also accused you of like secretly being that, even
Speaker 1: if you admit it, I'm really not. Look, I'm not
Speaker 1: a gold bug, but I'm not going to turn down
Speaker 1: when people give me gold as a present. Okay, Okay,
Speaker 1: that's fair enough, But I have at your sort of
Speaker 1: out of Okay, I'll move on. But I've always sort
Speaker 1: of suspected you have those anyway, the reason I have
Speaker 1: to apologize is because I'm coming around to that view
Speaker 1: myself and I myself. I've am kind of becoming a
Speaker 1: closet or maybe out of the closet gold bug myself.
Speaker 1: Isn't this like the third time you've changed your opinion
Speaker 1: on gold? I always go back and forth, but this time, Uh,
Speaker 1: it's actually specifically because of the guest that we were
Speaker 1: that we were going to talk to on today's episode.
Speaker 1: I recently started uh watching his videos on Instagram, and
Speaker 1: he's such a compelling salesman for gold and jewelry and
Speaker 1: gems that I'm kind of changing my mind on the
Speaker 1: whole thing, and I want to start getting to a
Speaker 1: hoarding gold. Well. Well, look, the field of people selling
Speaker 1: gold is kind of a crowded one, so I'm really
Speaker 1: curious what the sales pitch is exactly here. It must
Speaker 1: be a good one if it's if it's changed your
Speaker 1: mind again, well, you know, like for like the last
Speaker 1: ten years since you and I have been in you know,
Speaker 1: covering finance, most of the people advocating gold or like
Speaker 1: these sort of angry old fashioned types like Peter Schiff
Speaker 1: and they like spend all their time railing against the Fed,
Speaker 1: and honestly, like it's kind of tiresome. But I have
Speaker 1: been my eyes have opened up to a different case
Speaker 1: for it that I find to be far more compelling.
Speaker 1: What's the case. Well, let's before we get to that exactly,
Speaker 1: let's just backtrack a little bit. Um. I know you're
Speaker 1: in Hong Kong, but did you see the movie Uncut Gyms?
Speaker 1: I did. It was really really good, like pretty stressful
Speaker 1: at times, given it's about this New York jeweler or
Speaker 1: whose life is basically spinning out of control due to
Speaker 1: a gambling addiction. But it's really good. It's really good.
Speaker 1: It's really stressful. I would say it's probably my favorite
Speaker 1: movie that I saw, uh in the last year or two.
Speaker 1: I loved it. I want to see it again. But anyway,
Speaker 1: on today's episode, we are actually going to be speaking
Speaker 1: with a person who played a role. He was an
Speaker 1: actor in the movie, and he is a real life jeweler,
Speaker 1: so I know you're talking about. It was the behind
Speaker 1: the counter sort of jeweler or assistant in the main
Speaker 1: character's shop, jewelry shop, right exactly. So for those who
Speaker 1: don't know, who haven't seen it, you should see the movie.
Speaker 1: But Adam Sandler's character plays a jeweler in New York's
Speaker 1: Diamond district and one of his employees. The character Yussie
Speaker 1: is actually a real life jeweler who's been in the
Speaker 1: game for a long time, and he's here now and
Speaker 1: we're going to talk to him about what the business
Speaker 1: is really like, what the movie got right and wrong
Speaker 1: in why people love jewelry and gold so much. That
Speaker 1: sounds great. Let's do it all right, let's do it
Speaker 1: so without further ado, I want to bring in Mak
Speaker 1: sud Aga Johnny Hiss, the CEO and founder of Tracks
Speaker 1: and y See. He played the character Yussie in the movie.
Speaker 1: He's a jeweler. He sells jewelry, two rappers and others,
Speaker 1: much like uh, the Sandler character in the movie. Mak sued,
Speaker 1: thank you very much for joining us, Thank you for
Speaker 1: having me very much. Thank you. How did you get
Speaker 1: into How did this happen that you got a character
Speaker 1: in this movie and that you're an actual jeweler who
Speaker 1: is in Uncut Gems. Well, listen, they had this complicated
Speaker 1: scene in the showroom and Uncut Gems, and they needed
Speaker 1: to make it look like an authentic place with somebody
Speaker 1: who looks like a jeweler. And there's not that many
Speaker 1: people in Hollywood apparently that can fill that role. So
Speaker 1: they started looking for New York City jewelers Google. I
Speaker 1: guess I popped out. They auditioned me, and I got
Speaker 1: the part and I did the scene for him. So
Speaker 1: how did you get into jewelry in the first place?
Speaker 1: Then maybe we should back up, like, how did this
Speaker 1: become your career choice? How did I become an authentic
Speaker 1: New York City jeweler that they could google and find? Well,
Speaker 1: in two thousand and four, Um, when I graduated high school, Um,
Speaker 1: I just needed to start making money, and I saw
Speaker 1: that there was a market that was opening up on
Speaker 1: the internet on eBay. So I started photographing jewelry from
Speaker 1: a jewelry store I found on Canal Street downtown here
Speaker 1: in Manhattan and putting it up on eBay. And when
Speaker 1: I would sell a piece of jewelry, I would go
Speaker 1: and buy that piece of jewelry and chip it and
Speaker 1: keep the difference. And Uh, that wasn't particularly easy thing
Speaker 1: to do. It's easier to say now that it was
Speaker 1: to do back then. But I, you know, crow barred
Speaker 1: my way into the industry, and here I am. I
Speaker 1: didn't know I was going to be here fifteen years later,
Speaker 1: but I'm here and now like you're a legitimate star,
Speaker 1: I mean beyond the peering in the movie and all
Speaker 1: this attention you uh in your jewelry, your jewels, your shop.
Speaker 1: You sell the stars, you sell the rappers. Your website
Speaker 1: is amazing, has all kinds of no sort of traditional
Speaker 1: jewelry like chains, but um, you know, interesting like diamond
Speaker 1: encrusted you know, whatever they are. That's cartoon characters and
Speaker 1: pieces and Jesus heads and all sorts of stuff that
Speaker 1: whatever the market demands, I try to supply. How did
Speaker 1: you get into that aspect? So how did you go
Speaker 1: from essentially flipping cheap jewelry that you found on Canal
Speaker 1: Street on eBay into creating your own pieces and finding
Speaker 1: a high end market. If you want to increase your
Speaker 1: profit margin, you're gonna have to learn how to manufacture
Speaker 1: rather than buying from wholesalers. So little by little I
Speaker 1: learned how to manufacture, cast the gold, set the diamonds,
Speaker 1: get the diamonds from the diamond dealer for the right price,
Speaker 1: and uh, you know, and make a couple of honest
Speaker 1: dollars as they say. So I have so many questions
Speaker 1: I want to ask you but I want to get
Speaker 1: to the buy case for gold or for gold jewelry, because,
Speaker 1: like I certainly have never thought of buying a gold
Speaker 1: chain as necessarily an investment, but certainly on your videos
Speaker 1: and on your website you talk a lot about the
Speaker 1: investment case for gold. Why did you decide to take
Speaker 1: that approach, I'll tell you exactly why. Well, right now
Speaker 1: I'm wearing a chain that I bought in two thousand
Speaker 1: and seven that was around when gold was around seven
Speaker 1: hundred dollars an ounce or so, Okay, right now it's
Speaker 1: about close to sixteen hundred dollars an ounce, Okay, So
Speaker 1: if I scrapped that chain, the very same chain I'm
Speaker 1: wearing now, I'm going to get more than what I
Speaker 1: paid for it back then by a significant degree, almost double.
Speaker 1: And you know, for wearing a chain, that's pretty good.
Speaker 1: It's pretty good a return on investment, you know. So
Speaker 1: you just can't lose by buying that type of product.
Speaker 1: And when I I convinced my customers, or explain to
Speaker 1: my customers that if you're gonna buy something a luxury item,
Speaker 1: you know, there's a lot of options out there. You
Speaker 1: could buy a Gucci belt, you could buy this, You
Speaker 1: could buy high end fashion, high end brands. Not a
Speaker 1: single one of those is going to give you a
Speaker 1: return on investment in ten years. So it's really a
Speaker 1: no brainer. Gold could go down over the next ten years,
Speaker 1: and it has at times. Uh, It's sure, it certainly has,
Speaker 1: and everything could go down. But from the experiences and
Speaker 1: from from everything I've seen, I don't think it's gonna
Speaker 1: go down under a thousand dollars an ounce in in
Speaker 1: in my lifetime. I don't. I don't think it's gonna happen.
Speaker 1: So one thing in your videos which I was really
Speaker 1: drawn by is you do seem to combine both the
Speaker 1: sort of luxury goods pitch and you also talk about
Speaker 1: the fundamentals of gold. The first video I saw, I
Speaker 1: think was you had a chart of gold and you
Speaker 1: were looking at it right around the time that there
Speaker 1: was the strike that took out Sulamani in Iran and
Speaker 1: pitching jewelry as an investment around world events talk about
Speaker 1: what drives them? Is that a unique thing that you
Speaker 1: came up with, like our other people in the diamond
Speaker 1: district in your business, making making the pitch that way, No,
Speaker 1: they're not making the pitch that way and it's unique.
Speaker 1: And if you want to make any money or stand
Speaker 1: out in any way and you don't have anything unique,
Speaker 1: it's never gonna happen. You're gonna have to come up,
Speaker 1: Especially in the social media podcast world that we're in now,
Speaker 1: you're gonna have to come up with some information that
Speaker 1: people find useful. All right. So essentially what I try
Speaker 1: to do is I've tried to put on a show
Speaker 1: and the commercial break is my own merchandise. That's just
Speaker 1: pretty much what it is. Other people sell T shirts
Speaker 1: with their podcast. I sell jewelry and kind of sell
Speaker 1: a podcast with the jewelry, but the jewelry is sold
Speaker 1: on the podcast. Whatever works at this point, we should
Speaker 1: sell T shirts joke, yeah, or we should sell jewelry,
Speaker 1: I think yeah, So Max Suit, One thing I wanted
Speaker 1: to ask is, and this might be difficult to answer,
Speaker 1: but what percentage of your customers would you say are
Speaker 1: are drawn to the investment thesis that you're sort of
Speaker 1: or the investment pitch that you're putting out there versus
Speaker 1: people who just want to buy a nice jewelry. Well,
Speaker 1: you know, to be quite honest, I'm awakening them to
Speaker 1: that concept. Because they never considered it as investment pieces.
Speaker 1: But some of the people in hard times they get,
Speaker 1: uh they get their money back on some pieces that
Speaker 1: they buy. And it's common knowledge that you're going to
Speaker 1: get back more on a goal chain than on a
Speaker 1: diamond chain in certain circumstances. And they were always curious
Speaker 1: about that information. The people that had life experience, right
Speaker 1: the young kids, I just want to get iced out
Speaker 1: and throw away all their money. They might not really
Speaker 1: care about that. But people are already in their thirties
Speaker 1: or in their forties and they've been buying jewelry for
Speaker 1: a long time. They want to get what they pay
Speaker 1: for and they're looking for that information and nobody was
Speaker 1: filling that void. So I filled it in. And along
Speaker 1: with those people that we're looking for that information, I'm
Speaker 1: awakening a lot of other people to the fact that, uh,
Speaker 1: you know, um, there's a price and then there's value,
Speaker 1: and uh you know that that's a new concept for them.
Speaker 1: So you talked about how you started essentially moving up
Speaker 1: the food chain, so to speak, by uh contacting and
Speaker 1: getting relationships with diamond wholesalers and making your own jewelry.
Speaker 1: And one of the things that struck me. In the
Speaker 1: movie Uncut Gems was the main character, Hard Wrattner, Adam
Speaker 1: Sandler's character. He was always doing these deals with other people,
Speaker 1: and they're all word of mouth, including things like briefly
Speaker 1: pawning a Super Bowl ring for the week so he
Speaker 1: could get some cash so he could make another deal,
Speaker 1: and the person who gave him the cash would quote
Speaker 1: him a price or quot him an interest rates, and
Speaker 1: it was all just sort of word of mouth. Trust.
Speaker 1: Is that an accurate characterization of the industry in which
Speaker 1: everyone is just sort of trust each other at the word,
Speaker 1: and that's the key thing? Yeah, they definitely it's it's
Speaker 1: very accurate that the way they depicted him wheeling and dealing.
Speaker 1: And I've been in those types of situations myself, all right, umu,
Speaker 1: as much as one wouldn't like to admit it that
Speaker 1: I would. Sometimes you have to to close one deal.
Speaker 1: You have to have some value in some dead stock,
Speaker 1: you have to put it upon it for a week ago,
Speaker 1: get the other watch I set out, Go get it
Speaker 1: to the customer, then get the money, go bring it back,
Speaker 1: and and so on and so forth, and and hope
Speaker 1: you don't trip up along the way. And once you
Speaker 1: develop a reputation. Listen, if you have you know, um,
Speaker 1: a bunch of goal chains thirty thou dollars, and I
Speaker 1: have a client for it, I'm gonna come by and
Speaker 1: you have to decide whether I'm gonna go and grab
Speaker 1: that inventory and go to the airport and fly away
Speaker 1: and never see you again, or gonna go and sell
Speaker 1: it to that client that I have while you have
Speaker 1: the inventory that you want to move, and you have
Speaker 1: to wheel and deal, and you have to work with
Speaker 1: people who you trust, and that is just not much
Speaker 1: of evolution on that behavior since maybe ancient Babylon. You
Speaker 1: don't really know who you're trusting. You just get to
Speaker 1: know these people and um, you get a feel for
Speaker 1: their personalities, and you know, the little by little business
Speaker 1: experience will will will guide you. M So, Joe mentioned
Speaker 1: the pawning of the Super Bowl ring in the movie,
Speaker 1: and you just mentioned the idea of maybe sort of
Speaker 1: selling on something before you've received the money, or sort
Speaker 1: of like adding leverage to your deals. And there does
Speaker 1: seem to be an ecosystem of finance and and lending
Speaker 1: and credit built around the jewelry business. Why do you
Speaker 1: think that is like why are pawn shops and gold
Speaker 1: and jewelry intertwined to that degree. Well, I mean the
Speaker 1: materials are expensive, right, So when you're walking through the
Speaker 1: Diamond District, you're gonna have people hounding you from the
Speaker 1: street that are saying come into this shop, coming to
Speaker 1: that shop. Because you might be a high value person,
Speaker 1: it's worthwhile going through all this trouble and following a
Speaker 1: person down the street, um and bothering them maybe to
Speaker 1: get them into your shop. Right. You might not do
Speaker 1: that in front of the supermarket or something like that,
Speaker 1: but you'll do that in the Diamond district because that
Speaker 1: person might end up buying something that's fifty dollars and
Speaker 1: then the store owner is going to give you a
Speaker 1: commission of five hundred dollars and so on and so forth.
Speaker 1: So just the values of the items that you're dealing
Speaker 1: with create a whole new ecosystem, and things move quickly,
Speaker 1: so you're not gonna be able to do a lot
Speaker 1: of paperwork and things like that. So there's just a
Speaker 1: whole different environment that you can learn from, especially the
Speaker 1: way economics move, that you're not going to find in
Speaker 1: other industries like banking or something like that. And then
Speaker 1: you know, people over exert themselves. Right, People make mistakes.
Speaker 1: That's why economies fail for the most part. And and
Speaker 1: it it happens on a on a state level and
Speaker 1: happens on an individual level of people buy something they
Speaker 1: can't afford and they think that then they have hard
Speaker 1: times and they have to pawn it, and they think
Speaker 1: they're gonna come back in a month and they don't, right,
Speaker 1: and they and and and on and on it goes.
Speaker 1: And it happens with jewelry customers and jewelry business owners
Speaker 1: as well. Right, there's people that have been essentially printing
Speaker 1: money and doing great in the nineties and in the
Speaker 1: early two thousands that are now pawning their inventory, or
Speaker 1: people that were holding out when the gold prices at
Speaker 1: its peak and we're raising their prices, changing their tags,
Speaker 1: and now that are desperate to to scrap those pieces.
Speaker 1: And you know, just people make mistakes, They make miscalculations.
Speaker 1: And with the products like gold, which has its own dynamics,
Speaker 1: diamonds which have a completely different dynamic, and some of
Speaker 1: them are combined, you know, it just gets crazy. So
Speaker 1: one of the products for sale in the movie that's
Speaker 1: sort of very memorable is uh Adam Sandler's character. He
Speaker 1: has like a diamond encrusted furby and Tracy really wants one.
Speaker 1: Do you have any of those? They that those were
Speaker 1: made out of brass um in the in the film,
Speaker 1: they didn't actually make them out of golden diamonds, so
Speaker 1: they might turn in that green if you's better where
Speaker 1: too long? From an investment stand From an investment standpoint,
Speaker 1: you on your website, you sell like some that are
Speaker 1: just like basic change and then some, as you said,
Speaker 1: like diamond encrusted cartoon characters. Are those riskier the sort
Speaker 1: of more custom ones because you know it's fad like
Speaker 1: maybe like right now people are probably asking for like
Speaker 1: diamond encrusted baby yodas and stuff, but like in two
Speaker 1: years people might forget about that. So from like an
Speaker 1: investment standpoint, are those custom pieces a little for sure?
Speaker 1: For sure? I mean for consumer standpoint that yeah, it's
Speaker 1: definitely a luxury item, okay um. And from my standpoint
Speaker 1: as a manufacturer, well, the way it usually works is,
Speaker 1: let's say you make a hundred pieces and you want
Speaker 1: to get your money back by the time you sold
Speaker 1: fifty of them, all right, and the rest of them
Speaker 1: if they all right, you got your money back by
Speaker 1: number fifty and the rest of them is your profit. Now,
Speaker 1: if you sell out of those fifty twenty, you made
Speaker 1: a profit and the rest you scrap and you get
Speaker 1: back new materials. If you're stuck with him over a
Speaker 1: period of time, and that could be dicey, especially in
Speaker 1: this economy. You know that people don't have that type
Speaker 1: of spending power to consume these types of goods. So
Speaker 1: a lot of jewelers are getting stuck with this type
Speaker 1: of inventory, and it's really a tough business now more
Speaker 1: so than it never was. Can you give us an
Speaker 1: example of you getting stuck with a particular inventory, like
Speaker 1: one that was memorable for you, one that was memorable. Well,
Speaker 1: my my safest is filled with with stuff that I'm
Speaker 1: stuck with, so to speak. Um, but I've been pretty
Speaker 1: good and I'm not getting stuck with too many pieces.
Speaker 1: So the pieces that you're stuck with are the ones
Speaker 1: that are the least desirable. The most desirable things that
Speaker 1: you manufacture are going to be the first to go,
Speaker 1: and the least desirable are gonna be stuck with. So
Speaker 1: the stuff that that I'm stuck with, this the stuff
Speaker 1: that doesn't really attract anybody. Just rings that you know,
Speaker 1: we're off putting and things like that. But the good pieces,
Speaker 1: you know, I would make characters at a video game
Speaker 1: Street Fighter, or you'd make a Genie coming out of
Speaker 1: a Laddin's lamp or that. But those are all gone
Speaker 1: and people enjoyed them, and I don't have them anymore.
Speaker 1: So if I came in tomorrow and I said, you know,
Speaker 1: and I want to get a gift for Tracy. I
Speaker 1: want to get her that diamond and crushed furb, what
Speaker 1: would you require? What would be the process? I will
Speaker 1: maybe what would be the process? What would you expect
Speaker 1: to me? Do I have to like put money down? Like? What?
Speaker 1: How would how's the process? I'll explain exactly what the
Speaker 1: process is. So if you want to cust manufacture anything,
Speaker 1: you're gonna have to put a deposit right down to
Speaker 1: so we could start making the model of what it's
Speaker 1: gonna look like on a computer in three D. Once
Speaker 1: that's done, all right, so you put a thousand dollars. Now,
Speaker 1: let's say you have a ten thousand dollar budget on
Speaker 1: whatever you're manufacturing, whether it's a it could be a
Speaker 1: customer engagement ring or a Furby piece or zodiac whatever.
Speaker 1: So you put a thousand bucks down, Well, show you
Speaker 1: what it's gonna look like. We do all the calculations
Speaker 1: so much, it's gonna weigh how many carrots it's gonna be,
Speaker 1: and then you have to put a production deposit down,
Speaker 1: which is gonna be around another five thousand, four thousand,
Speaker 1: and then we finish it. You see it, and you
Speaker 1: finished paying for it. You wear it. Tracy's happy, You're happy,
Speaker 1: I'm happy, Bloomberg's happy. I'm not sure if all of us,
Speaker 1: if I'll see what happens if I tried to expense that,
Speaker 1: But if all of us are going to be happy,
Speaker 1: I think we have to do it. Make a gold
Speaker 1: heavy and you'll be good. I will be the happiest
Speaker 1: of all. So yes, we should do this. Um. So,
Speaker 1: you mentioned three D printing just then, and in watching
Speaker 1: some of your videos that definitely comes up a lot.
Speaker 1: How important was three D printing or how much of
Speaker 1: a revolution was it for the jewelry making industry? Like
Speaker 1: how did people make these custom pendants, whether it's furbies
Speaker 1: or baby yodas or Jesus heads or whatever, How did
Speaker 1: they do that before? And did it become more popular
Speaker 1: once three D printing came into being. Well, they were
Speaker 1: doing it by hand, So they take a piece of
Speaker 1: wax and carve it out by hand, and the waxes
Speaker 1: that they would make were far more primitive than what
Speaker 1: you could make on a computer now. And you know
Speaker 1: the complicated things like back uh you know how where
Speaker 1: a hundred years ago or so, like a Faberge egg,
Speaker 1: that was stuff that was done by hand and that
Speaker 1: was extremely difficult to do. You'd have to get an
Speaker 1: incredible craftsman to do that. Now you could make that
Speaker 1: type of stuff to even higher quality and higher detail
Speaker 1: on a computer. So you know, it's it's it's a
Speaker 1: world away and which you could manufacture. The jewelers have
Speaker 1: really not tapped into it just yet to the to
Speaker 1: the capacity that that that it could be, because your
Speaker 1: capabilities are limited by your imagination with this machine that
Speaker 1: prints out whatever it is you came up with. So yeah,
Speaker 1: I definitely recommend people should check out your Instagram and
Speaker 1: check out the three D printing videos because they're really cool.
Speaker 1: Are you rare? Like if you were to go to
Speaker 1: other shops in the Diamond district? Is that still something
Speaker 1: that most of them haven't gotten into they don't have Well,
Speaker 1: you have to manufacture to a high degree to own
Speaker 1: a three D printer. The three D printer I just bought,
Speaker 1: and I just bought it a couple of months ago,
Speaker 1: was about sixty tho dollars, okay, And we did some
Speaker 1: research and we we got a pretty good one, and
Speaker 1: so on and so forth. We gotta learn how to
Speaker 1: use it first and foremost. It's not like the printer
Speaker 1: you have at home. There's some maintenance there and the
Speaker 1: materials you gotta buy. And so so I had a
Speaker 1: girl that knew how to do it, so we're able
Speaker 1: to make that leap, and that's pretty forward thinking. The
Speaker 1: average jeweler is not going to have that. The manufacturer
Speaker 1: might have it, but it's still new technology, so you know,
Speaker 1: Grandpa is not going to be able to tune into
Speaker 1: it that quickly. And I'm more a little bit, I guess,
Speaker 1: as far as jewelers are concerned on the younger side.
Speaker 1: So I'm trying to use any advantage I could get,
Speaker 1: and that's definitely a big one. This feeds into something
Speaker 1: else that I always wondered about. But if I buy
Speaker 1: a piece of jewelry, what percentage of it on average,
Speaker 1: I guess is going to be the actual labor cost
Speaker 1: versus the input cost of the materials like gold and diamonds. Well,
Speaker 1: that depends who you're buying it from, all right, if
Speaker 1: you're buying it um from Tiffany and Coal. Let's say,
Speaker 1: for example, tiff a silver is about two dollars a graham.
Speaker 1: So don't do much more math than that when you're
Speaker 1: going in there. I don't wanna, you know, disparage the
Speaker 1: entire industry, but when you're going to buy a shirt
Speaker 1: or when you're going to buy something, if you think
Speaker 1: about the cost of the material versus what you're paying
Speaker 1: for it, it's not fair to apply that to the
Speaker 1: jewelry business too much. And I and the only one
Speaker 1: to blame for that because I started making that application
Speaker 1: for people. You know what the value is. But there's
Speaker 1: a there's a significant difference. And especially for the most part,
Speaker 1: you're paying for branding. Okay, you're going to Cardiare and
Speaker 1: you're buying a gold bracelet and diamond bracelet, but you're
Speaker 1: paying more for the name Cardier. You're paying more for
Speaker 1: the name Tiffany and Co. That's why there is a
Speaker 1: Diamond District here because once people realize, Okay, I bought
Speaker 1: this one carrot uh platinum ring for Tiffany for twenty thousand,
Speaker 1: but the materials to manufacture that ring cost seven thousand
Speaker 1: or eight thousand dollars in the Diamond district, and the
Speaker 1: materials are really four thousand. I mean you you you
Speaker 1: do the math, and it creates a demand for the
Speaker 1: Diamond district for these bigger brands. And but you know,
Speaker 1: then you also increase your risk when you're making that
Speaker 1: type of purchase. Tiffany and Co. Is gonna get you
Speaker 1: exactly what you pay for. You wanna save ten thousand dollars,
Speaker 1: you might or you might get uh you know, some
Speaker 1: sort of disappointment or this or that, and there you
Speaker 1: are simple to reality other than say buying from you,
Speaker 1: because I'm sure you'd recommend yourself as the most reputable
Speaker 1: and honest jewelry dealer. First for your sort of an
Speaker 1: average person, what would be some things like sort of
Speaker 1: like buying tips that they should know so that they
Speaker 1: don't get hoodwinked when they're buying a piece of jewelry
Speaker 1: somewhere in the diamond Sure, well, listen, you want to
Speaker 1: read the reviews. Okay, so we're celebrity shop. But it
Speaker 1: doesn't matter what I say, because the average person does
Speaker 1: what celebrities do, okay're not sitting here using information to
Speaker 1: to make complicated decisions and things like that. That's what
Speaker 1: I've realized, okay, and that's why I have such a
Speaker 1: hard time, you know, marketing the business to a certain extent,
Speaker 1: because the average person doesn't care about information or value
Speaker 1: or anything like that. They're all celebrities are buying here.
Speaker 1: I'm buying here too. I'm a celebrity. Now that's the
Speaker 1: way they're thinking. That's the end of it. But for
Speaker 1: the person that is interested that, you just got to
Speaker 1: do your research reader reviews, look up the price. Google
Speaker 1: is an extraordinary tool. You know. You can figure out
Speaker 1: the distance from here to Mars or or anything you
Speaker 1: could imagine. So if you really want to research the
Speaker 1: price of something, you just put price of one carrot,
Speaker 1: or price of this, the price of that, and do
Speaker 1: simple math like I did when I was twenty one
Speaker 1: years old, you know, or whatever it is to figure
Speaker 1: out how to get the ball rolling. And that's just
Speaker 1: a general rule for anything. Max Suit. You mentioned that
Speaker 1: the dynamics are different for gold versus diamonds. And the
Speaker 1: movie Uncut Gems. I don't think I'm giving anything away,
Speaker 1: but it revolves around this massive black opal um that's uncut.
Speaker 1: Can you explain like the differences in how those different
Speaker 1: markets actually work, Like, what is the difference between how
Speaker 1: gold functions versus how an uncut gem or a diamond functions. Sure? Well,
Speaker 1: first and foremost doesn't matter if you're buying a gram
Speaker 1: of gold or ten kg of gold. It's the same
Speaker 1: price per gram, alright, so the price doesn't diminish with
Speaker 1: how much you buy. But with aamonds that greatly affected. Right,
Speaker 1: if you're buying a thousand carrots of diamonds or one carrot,
Speaker 1: you're paying two completely different prices per carrot. And that
Speaker 1: is because liquidating gold, which is gonna you know, the
Speaker 1: bank will buy it or something like that, you know,
Speaker 1: a governments buy it or and and has that type
Speaker 1: of demand where they'll they'll trade it for cash. And
Speaker 1: at a moment's noticed, diamonds don't have that. You have
Speaker 1: to find a consumer to sell your diamonds, and that
Speaker 1: is a difficult process. Okay, there is a demand for
Speaker 1: diamonds everybody wants diamonds. No one's gonna be um object
Speaker 1: to having diamonds. If I started giving out diamonds in
Speaker 1: your office, I don't think i'd get to people to
Speaker 1: say no, no, thank you. But the reality is how
Speaker 1: much are they willing to pay for them? Okay, So
Speaker 1: if I'm going through their job of advertising a business
Speaker 1: and finding the consumers, and I'm gonna be able to
Speaker 1: buy a thousand carrots a month or something like that,
Speaker 1: like right now, I buy about five dred carrots a
Speaker 1: month or something around there, you know, I should definitely
Speaker 1: get away better price than the person buying one characters.
Speaker 1: I'm allocating all of these consumers, and I'm putting together
Speaker 1: all these marketing plans and investing all these marketing dollars
Speaker 1: to be able to move those goods. So you go
Speaker 1: to the word uncutting uncut gems. So the way the
Speaker 1: let's just put that on pause for a second and
Speaker 1: I'll give you an insight into how these materials travel.
Speaker 1: You dig them up from wherever they're at. Then comes
Speaker 1: the process of cutting them and polishing them. All Right,
Speaker 1: So most of that happens in India. The labor is
Speaker 1: cheap and the stones get there, they get over there.
Speaker 1: So half of the game is buying the rough and
Speaker 1: then having it polished and having the polishers. And there's
Speaker 1: only there's some big players doing that stuff. Okay, whether
Speaker 1: that's coming for um in Israel or Belgium for the bigger,
Speaker 1: bigger stones and for the smaller stones, is going to
Speaker 1: be happening in India. So once you've bought the rough
Speaker 1: for cheap from the minor is whatever it's going on there,
Speaker 1: I'm not sure because I'm not in that part of
Speaker 1: the business. And then you get it polished with your
Speaker 1: big polishing production wherever that's at. Now you're bringing it
Speaker 1: to the Dimond district to go get it to the
Speaker 1: end consumer. And that's where I come in because I'm
Speaker 1: getting into the end consumer. So if you're gonna give me,
Speaker 1: if I'm gonna sit here and liquidate all these these
Speaker 1: materials into cash, I'm gonna make sure that I get
Speaker 1: it for way cheaper than what I sell it for.
Speaker 1: Otherwise I'm not gonna do it. So that is um.
Speaker 1: That is just the game of it, all right. There's
Speaker 1: the miners, they're playing their game, the polishers, and then
Speaker 1: the polishers bring it to the wholesalers and bring it
Speaker 1: to the retailers. And you know that's that's pretty true
Speaker 1: how it moves. At some point you say you don't,
Speaker 1: you're not at the spot where you interact with the miners.
Speaker 1: Could that be on your roadmap at some point as
Speaker 1: you seek to expand and get bigger and go every
Speaker 1: single jeweler that's ever found success. If you want to
Speaker 1: increase your profit margin, and you cannot increase your prices
Speaker 1: because you're gonna other people are gonna cut into your
Speaker 1: into your market share, so you have to lower the
Speaker 1: cost of your product. Okay, Now what's the cheapest way
Speaker 1: of lowering the cost of your product? Well, you could
Speaker 1: mind the goods yourself. Now obviously you don't have the
Speaker 1: time to mind the goods yourself. Well, then you have
Speaker 1: to get somebody else to do it for you. And
Speaker 1: then the game goes right and you where you're gonna
Speaker 1: get somebody to do that? Well, you could either just
Speaker 1: buy it from the miners directly and then get it
Speaker 1: polished yourself, which is the bigger players. That's how they
Speaker 1: do it. And then your margins increase when you when
Speaker 1: you're doing things like that. So the people that were
Speaker 1: able to over years, you know, build a dynasty over
Speaker 1: there and buy Some of the buildings on Fort Street
Speaker 1: between fifth and sixth Avenue were ones that got directly
Speaker 1: from the miners got the you know, uh, the polishers
Speaker 1: had a and and the cutters had a very close
Speaker 1: relationship with them and got the product from the ground level,
Speaker 1: and we're able to sell it at the retail. That's
Speaker 1: the only way to really go in that type of industry.
Speaker 1: They controlled the whole supply chain, you have to. So
Speaker 1: you mentioned, well, when we were talking about diamonds, you said,
Speaker 1: everyone loves diamonds, and you know, if you're handing them
Speaker 1: out for free, no one would say no. But one
Speaker 1: thing that we hear a lot nowadays is that millennials
Speaker 1: or younger people actually aren't buying diamonds as much as
Speaker 1: they used to, maybe because they're out of fashion in
Speaker 1: some ways, or maybe because there's concern about where the
Speaker 1: diamonds come from, like whether or not their blood diamonds,
Speaker 1: and maybe also there's concern about artificial diamonds sort of
Speaker 1: contaminating the supply. Do people still want diamonds and do
Speaker 1: any of those trends like lab grown diamonds actually impact
Speaker 1: your business. Yeah, everything impacted from from everything you mentioned. Well,
Speaker 1: you know, certain millennials are off put by diamonds nowadays
Speaker 1: because they have a whole different mentality. And number one,
Speaker 1: they really don't have the money to buy any diamonds,
Speaker 1: all right, that's just a reality as well. They don't
Speaker 1: have any of that extra income that they're gonna sit
Speaker 1: here and start getting diamonds for their girlfriend on Valentine's
Speaker 1: Day and things like that. They're lucky if they could
Speaker 1: take them out to a to a normal restaurant. And
Speaker 1: on the other hand, well that's on one half of it.
Speaker 1: The other half, the demand is increasing for more of
Speaker 1: a hip hop style jewelry as hip hop is expanding
Speaker 1: around the world, and it's really a force that people
Speaker 1: are underestimating because it's capturing the youth in ways that
Speaker 1: it's it's never been captured before more and more. Right, So,
Speaker 1: whether you're in Europe or now in Asia and you're
Speaker 1: and you're fifteen and sixteen, and you're listening to these
Speaker 1: rappers uh a little Pump or Takashi or what have you,
Speaker 1: and they're spending two hundred fifty thousand dollars on a
Speaker 1: piece of jewelry. All right, they're not sitting there and
Speaker 1: listening to the not finishing their social studies, homework and
Speaker 1: things like that right now. For you guys over here,
Speaker 1: you're not in that mentality. But they're young, and they're impressionable,
Speaker 1: and they're not being influenced, uh, you know, by fiscal policy.
Speaker 1: You know, they're they're being influenced by someone who took
Speaker 1: two fifty dollars and bought a necklace, and they want
Speaker 1: to participate in that, and they participated, so that that
Speaker 1: market share is probably gonna grow and uh, and the
Speaker 1: one that's gonna decrease is probably gonna be these uh,
Speaker 1: these millennials that there are there. They might just switch
Speaker 1: to what they're buying. They might buy a little sapphire
Speaker 1: in a silver ring or something like that, or something
Speaker 1: on the cheaper end. Uh, there's still a profit margin there,
Speaker 1: so to speak, that the market is going to shift
Speaker 1: around that. And then when it comes to lab made
Speaker 1: and grown diamonds, well, you know, diamonds have a destiny,
Speaker 1: all right. The reality of diamonds is there a carbon crystal,
Speaker 1: and that carbon crystal would be uh has amazing acoustic properties, Okay,
Speaker 1: and it also has uh, you know, it would be
Speaker 1: great for um, a window on a spaceship or something
Speaker 1: like that, or you could put it. You could if
Speaker 1: you could make an engine out of diamonds instead of
Speaker 1: out of steel, it'd probably last to you know, a
Speaker 1: couple of million miles or maybe indefinitely. So it has
Speaker 1: a destiny that's not just for you know, aesthetic appeal
Speaker 1: or something like that. So it's and it's gonna end
Speaker 1: up there. I don't know how long it's gonna be,
Speaker 1: but I think that diamonds are gonna be manufactured more
Speaker 1: and more, and then once it has some industrial purpose,
Speaker 1: I don't know what's gonna happen, but it's gonna be interesting. Well,
Speaker 1: this gets to something that I really wanted to ask it.
Speaker 1: I think it's sort of one of the big things
Speaker 1: that's been on my mind since watching the movie, which
Speaker 1: is just sort of the obsession with diamonds and gems.
Speaker 1: And the movie opens up with one of the miners
Speaker 1: uh in Africa getting injured. We see the extreme length
Speaker 1: that the people on the diamond district go to, like
Speaker 1: get their hands on gems. We see the impact that
Speaker 1: the gem in the movie had. Kevin Garnett the basketball
Speaker 1: player inspiring him uh in the movie to when the
Speaker 1: NBA Finals and so forth. Just in your view sort
Speaker 1: of like from a big picture standpoint, what is it
Speaker 1: about diamonds, What is it about gems? What is it
Speaker 1: even about gold that just sort of like hits people
Speaker 1: at this fundamental level that they just go crazy to
Speaker 1: dig up rocks the earth. Well, that's a good question. Um.
Speaker 1: Gold is called the most beautiful element. Okay. So there's
Speaker 1: I don't remember how many elements there are, I think
Speaker 1: like a hundred or something like that, um around there,
Speaker 1: and out of all of them, the most beautiful is gold. Okay.
Speaker 1: It has an incredible reflective properties. It reflects light. Uh,
Speaker 1: it looks like sunshine when regular light hits it reflects it.
Speaker 1: It's quite beautiful. That's all it needs, right. It's to
Speaker 1: some people in this world, beauties all they all they
Speaker 1: need to get by. And that's what that's what these
Speaker 1: gems have. And they attract at tension. Right. Um, If
Speaker 1: there was a bar of gold in a room and
Speaker 1: somebody walked in it, their eyes are immediately on it.
Speaker 1: And if you and if you have that substance that
Speaker 1: those eyes are going to kind of transfer on you.
Speaker 1: You kind of share those properties all right on on
Speaker 1: on a subconscious level with them. You have it, why
Speaker 1: don't Why doesn't everybody have gold? Right? I just did
Speaker 1: a calculation the other day. If we were going to
Speaker 1: distribute all the gold that's ever been mined evenly, everybody
Speaker 1: would get around eleven grams uh per person okay of gold,
Speaker 1: right if we were all equal. But we're not all equal.
Speaker 1: Some people have massive amounts, some people have nothing at all.
Speaker 1: And who has the massive amounts? Who's who? And what's what?
Speaker 1: All that just plays into into that and and and
Speaker 1: that just there's an advertisement for for people that they
Speaker 1: have this beautiful stuff and any others. And the other hand,
Speaker 1: it is beautiful because I have a couple of sapphires
Speaker 1: um I own, right that I didn't I'm saving or
Speaker 1: I'm using for something interesting. And when you look into
Speaker 1: some of these sapphires, maybe it's in my head, but
Speaker 1: it's such a beautiful blue, right, and it's and some
Speaker 1: of the ones I have are very rare as opposed
Speaker 1: to some of the really dark ones that don't have
Speaker 1: that luster. And you find that perfect pitch of of
Speaker 1: color and cut and clarity and and it becomes something
Speaker 1: so rare that you really just enjoy just looking at it.
Speaker 1: You know, I don't know, is that your favorite genman sapphires.
Speaker 1: I love sapphires. It's it's been it's my birth stone.
Speaker 1: So you know when I yes, when I so just
Speaker 1: you know when I when I first saw the sapphire
Speaker 1: and I was told was my birth stone? Again, just
Speaker 1: a psychological impact of that when I was young, you know,
Speaker 1: I was just intrigued. But okay, it's my birth stone.
Speaker 1: Can I have one? No? You don't have any money, right, um?
Speaker 1: Or here's this little one or here's just this tiny one,
Speaker 1: but where's the bigger ones? Mom? Or this one? That one?
Speaker 1: And and you have that feeling that this is something
Speaker 1: you want but can't have. Why not, Well, there's not
Speaker 1: enough of them for everybody. You have to be special
Speaker 1: to have one, and there's just it's just a part
Speaker 1: of the human experience that's not really going anywhere. Tracy.
Speaker 1: If I get you a gentleman crusted ferby, will you
Speaker 1: get me a sapphire for my birthday? That sounds like
Speaker 1: a really good trade actually, because I'm pretty sure the
Speaker 1: ferby is going to cost so yes, yes, you can
Speaker 1: have a small dark staff fire. I'm getting a lot
Speaker 1: of business here. I'm hoping you guys are gonna be
Speaker 1: buind it from me and no one else. How's your
Speaker 1: I'm curious how your life hasn't changed in anyway since
Speaker 1: the movie came out. Yeah, definitely, um uh, it's definitely
Speaker 1: a benefit. Right. The way I equated is if I
Speaker 1: was trying to put myself in a movie for a commercial,
Speaker 1: I think it would cost me over a million dollars
Speaker 1: to do something like that, right if I was if
Speaker 1: I had it came out with a new car line
Speaker 1: or or a car and I want to put it
Speaker 1: in a new James Bond movie. Right, it was, you know,
Speaker 1: and I had to you know BMW and I wanted
Speaker 1: to put it in there. I think it would be
Speaker 1: a quite expensive endeavor. So for me to be a
Speaker 1: jeweler in the Diamonds and get a part in a
Speaker 1: in a in a Diamond District movie one of the
Speaker 1: very few that there's been, um is a blessing essentially,
Speaker 1: So it definitely has benefit me. And it just to
Speaker 1: hit international Netflix, uh so people are messaging me all
Speaker 1: the time, and then when it hits regular Netflix, people
Speaker 1: are gonna watch it. It might be a cult classic,
Speaker 1: so I might be. Yeah, I think you know, so,
Speaker 1: I think it's gonna be a millionaire's every one in
Speaker 1: them and have opinions on of course. Yeah, and they
Speaker 1: all like it. It's it's pretty good. Well, Uh, Marx
Speaker 1: sud I'll go, Johnny, thank you so much. That was fantastic.
Speaker 1: Been looking forward to this conversation a long time and
Speaker 1: I appreciate you coming on. Oh, I've one last very
Speaker 1: small question. And if I don't get diamond and crested furby,
Speaker 1: like what, let's say I don't want to spend quite
Speaker 1: that hard. What's just sort of like a nice, like
Speaker 1: basic thing to get someone? Um, well, you know that's
Speaker 1: a good question. Um, some gold jewelry is cool and
Speaker 1: something with gems, and it's something with diamonds, but it's
Speaker 1: it's something personalized. I think would be would be the
Speaker 1: uh has the best effect on people when I make
Speaker 1: a customer engagement ring or a customary ear rings with
Speaker 1: birth stones surrounded by diamonds or something, um, custom made
Speaker 1: with your involvement and the jeweler's involvement, and it has
Speaker 1: a special output for the person that receives it. All right,
Speaker 1: I'll be I'll be by the shops there, all right,
Speaker 1: sounds good. Thanks. I appreciate you, Joe. Just in case
Speaker 1: you're wondering, In addition to a diamond encrusted furby, I
Speaker 1: would also take a gold plated outline of the vix curve.
Speaker 1: You can have that made, Okay, I have to think
Speaker 1: about what I want customized from you it. I'll definitely
Speaker 1: I'll get you one of those two things for sure. Excellent, excellent.
Speaker 1: So I think I am. I'm a legit, I'm a goldbug.
Speaker 1: Now I'm totally sold and I totally get it. You
Speaker 1: know what I really liked in fact um, among other things,
Speaker 1: I thought Mark SuDS point about how little gold uh
Speaker 1: everyone would get if we had to distribute it evenly,
Speaker 1: because at some level, okay, yes, life isn't fair, but
Speaker 1: it is the ultimate sort of emblem of like, yeah
Speaker 1: there is there are aspects of the world that are
Speaker 1: a zerosome game, and if you have more gold then
Speaker 1: that means someone else has less of it. And just
Speaker 1: sort of like that sort of drive like something about
Speaker 1: that really resonates to me is I can see why
Speaker 1: people not only want to acquire it, but show off
Speaker 1: that they have it. I think you're becoming an economic nationalist.
Speaker 1: But there's one thing that we didn't discuss, which is okay,
Speaker 1: So obviously gold is a status symbol. It signifies power
Speaker 1: and it signifies wealth. But in the movie and Uncut Gems,
Speaker 1: gold and all this jewelry and the black opal that
Speaker 1: we spoke about actually becomes a problem for the guy, right.
Speaker 1: It's it's a source of instability in his life and insecurity.
Speaker 1: And I wonder, you know, if you do put all
Speaker 1: your money into gold, then obviously you have a storage issue.
Speaker 1: You're gonna have to put it someplace safe. You might
Speaker 1: worry about wearing all your jewelry out on the street.
Speaker 1: I don't know, but it seems like it can be
Speaker 1: a source of insecurity as well as a display of power. Yeah.
Speaker 1: I thought about that too, like a source of insecurity,
Speaker 1: source of stress, like just having to put everything in
Speaker 1: a safe every night, thinking about ensuring that. Or you
Speaker 1: go buy these jewelers, jewelers when you walk across them
Speaker 1: at night, and of course they've emptied out their shop
Speaker 1: windows so there's nothing even visible like that whole process
Speaker 1: of having to protect protected, you know to some extent
Speaker 1: protect yourself. Uh. It definitely seems like, yes, it's a
Speaker 1: source of power. It also seems like it would be
Speaker 1: a major source of anxiety. That said, I still want
Speaker 1: the diamond Furby. I would still take it, Okay, I
Speaker 1: would guard it. I would wear it every day and
Speaker 1: take such good care of it. All Right, I'll see
Speaker 1: what I could do. I'll see if I could expense it.
Speaker 1: All right. This has been another episode of the Odd
Speaker 1: Thoughts Podcast. I'm Tracy Alloway. You can follow me on
Speaker 1: Twitter at Tracy Alloway. And I'm Joe Wisenthal. You can
Speaker 1: follow me on Twitter at the Stalwork. And you should
Speaker 1: definitely follow our guests on Instagram is Uh it's really
Speaker 1: amazing to watch. He's tracks n y c. Name is
Speaker 1: muksud Aga Johnny awesome Instagram account. I swear he's turned
Speaker 1: me into a gold bug. And I'm going to go
Speaker 1: to his shop uh soon and you can see him
Speaker 1: talk about all these things and show the manufacturing process.
Speaker 1: It's a very cool. Also, you should follow our producer
Speaker 1: on Twitter. She's Laura Carlson. She's at Laura M. Carlson.
Speaker 1: You should follow the Bloomberg head of podcast Francesca Levy
Speaker 1: at Francesco Today and check out all of our podcasts
Speaker 1: under the handle at podcasts. Thanks for listening.