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In Padparadscha’s under 1 carat I mentioned that pads are amongst the riskiest gems to trade in, a chance to gamble high, lose high or win money beyond the normal risk-profit ratio that is inherent in the gemstone business (an uncommon high risk-profit-balance BTW, compared to other industries which attracts certain type of personalities, gamblers most obviously, but of that more on a different day). 


... read more ...

Round Precision Cut Padparadscha round certified untreated brilliant cut
Price:
$16,000.00
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1.36 Carat
Pinkish Orange
Medium Dark 60
Lightly Included

real natural unheated certified padparadscha sapphires
Price:
$3,900.00
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1.02 Carat
Bright Sunset Orange Pink
Medium 50
Lightly Included

Tanzanian Ruby

1.06 Carat (sold)
Sunset Orange Pink
Medium Dark 65
Very Lightly Included

1.04 Carat (sold)
Intense Orange Pink
Medium Dark 60
Lightly Included

Certified unheated padparadscha sapphire mild peach
Price:
$19,500.00
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1.63 Carat
Orange Pink
Medium 40
Lightly Included

1.50 Carat (sold)
Lively Orange Pink
Medium 55
Very Lightly Included

Price:
$9,500.00
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1.08 Carat
Lively Orange Pink
Light Medium 40
Lightly Included

emerald cut padparadscha sapphire
Price:
$11,800.00
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1.33 Carat
Orange Pink
Light Medium 40
Lightly Included 

pair peach pear pads with lab reports

1.65 Carat (pair) (sold)
Rich Orange Pink
Medium Dark 65
Lightly Included

 

Price:
$3,950.00
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1.00 Carat
Rich Orange Pink
Medium 55
Lightly Included

oval bargain padparadscha certified and unheated
Price:
$8,800.00
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1.26 Carat
Silky Orange Pink
Medium Dark 60
Lightly Included

pair matching no-heat padparadscha sapphires
Price:
$14,250.00
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2.23 Carat (pair)
Mild Pinkish Orange
Light Medium 40
Free of Inclusions


 

peach pink orange unheated Madagascar Sapphire
Price:
$4,500.00
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1.22 Carat
Deep Sunset Orange
Medium Dark 70
Very Lightly Included

African Sapphire in earthy orange
Reg. Price:
$2,600.00
Sale Price:
$1,900.00
Save:
$700.00
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1.19 Carat
Lavender Pink
Medium Dark 60
Lightly Included

Tanzanian Padparadscha pair bargain sale
Reg. Price:
$2,200.00
Sale Price:
$1,600.00
Save:
$600.00
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1.01 Carat (pair)
Orange Pink with CS
Medium Dark 65
Free of Inclusions

sunshine orange sapphire no heat
Price:
$4,500.00
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2.56 Carat
Bright Orange-Yellow
Light 33
Very Lightly Included

 

orange red sapphire without treatments and inclusions
Price:
$4,800.00
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1.52 Carat
Mild Orange Red
Medium Dark 75
Lightly Included​

Foggy sunset Padparadscha spinel
Reg. Price:
$1,450.00
Sale Price:
$750.00
Save:
$700.00
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1.16 Carat
Foggy Sunset
Medium 55
Free of Inclusions

precision cut unheated orange pink padparadscha zircon from Sri Lanka in oval precision cut
Price:
$1,200.00
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1.32 Carat
Bright Orange Pink
Light Medium 40
Free of Inclusions

 


... continued

My first big gamble on a pad came in the shape of a flat rough sapphire a miner brought to me about 10 years ago, while I was living in Sri Lanka. The uncut sapphire glowed with a pinkish salmon hue.

The miner, had dollar signs in his eyes, but so did I! He was not from our area, I had never seen him, nor did he come with any recommendations - normally a deal breaker - but when padparadschas are involved caution suffers.

The rough on offer weighed just over 3 grams (15 carats), which, with good quality cutting, might yield around 3 carats as a finished gem. Note: Three grams rough = Three carat cut.

(BTW: This rule of thumb “One gram rough = one carat cut" (20% yield) works pretty well as an average and over big parcels. In such a particular case, where a single rough is sold, the buyer and seller may haggle for hours about what yield, and thus final value, the rough may produce.)

For this padparadscha rough I estimated no more than two carats final yield because the rough was flattish and cutting it without window would lose us half the rough material, a fact that the seller refused to accept and kept on calculating a five carat yield. This was no malice. In his world, the gem would have been cut with window to five carat. To his mind, I was actually ignorant of cutting rules or simply crazy, or trying to cheat him.

At any yield rate, the stone was, at the time, the biggest I have had the chance to acquire in my career. Gem quality padparadschas are so rare that you may search the mining areas for a year without finding one. In Colombo, owning a plus one carat unheated padaparadscha is like a membership card to the serious dealer club. 

Since I was already then buying only untreated gems, I studied the rough for signs of heat treatment. There were none visible and the seller pleaded “guaranty-guaranty no heat” a dozen times. People in our area knew I bought only untreated gems, so they usually did not even try to sell me heated sapphires. In fact, the miner told me that he had come especially to me, for he had heard I paid extra for unheated sapphires. That’s why he took the long journey to me, five hours on the bus, he said. I was more than willing to trust. The sale of a fine unheated two carats padparadscha could cover the company's costs for months.

So, yes, I wanted the stone. On we haggled, whined, argued and threw offers and counter offers at one-another, threatened to quit the deal, recanted and backpedaled.

As usual, after a while, the whole village had gathered to enjoy the show.

Though full of psychologically valuable insights into the human mind, I'll not describe the long and winding path that our negotiating took, but jump ahead six hours. I bought the rough at my own upper-most limit, meaning I spent all my cash on hand. The seller squeezed his maximum out of me. More would not have been possible.

If you are interested in such negotiations in the gem trade, I have here an interesting section from ‘Monkey Business in Kenya’ describing a buyer’s week in Tsavo National Park. It's fiction based on 100% true details.

After a short night, the rough and I drove to our lapidary at "World's End". I waited, walking up and down in the lapidary’s backyard, like an expectant father.

In the evening, the job was done, finally. And a beauty it was! Two and half carats, no window, no visible inclusions, great luster, a soft gleamy mix of sunset and papaya. No brown, no purple, no yellow. I was as happy as a birthday boy! Praising the cutter for his good planning and his precise traditional cutting, I gave him my very last money as a cash bonus. He pocketed the bills but then pulled a sheepishly sad face. My good mood faltered as I made the local hand sign for "what's-the-matter?", a double turn of the opened hand. He stuttered, looked away and then at my padparadscha, I paled, and he said the one word that would ruin months to come: “Heat.”

These old hound lapidaries are miraculously correct in detecting heat treatment. GIA and AGL need million bucks worth of scientific equipment, but these experienced fellows know it all, just from their fingertips. During the facetting and polishing they sense the increased brittleness that heat causes on all gemstones. 

Still, I was unwilling to believe and raced home to my microscope, and, dammit, he was right. Now, after faceting, I could see deep into the gem which is impossible in the rough. There, I found clear signs of heat treatment, exploded crystals and melted inclusions.

No, no, no! I pulled my hair and stamped the ground. The more I raved, the clearer it became: I had ignored the obvious risks, had greedily thrown my own safety rules overboard and bought a top value rough from a complete stranger without a full test and no way back. If I hadn’t been so eager I would have insisted on a first part payment and then a final payment after cutting. A normal process. To my excuse, I did ask for a 50/50 deal but he refused on the grounds that he could not travel again next day from his home to me. Too far, he said. My suggestion to stay the night in a local guesthouse, he refused because of his pregnant wife waiting at home. Oh, the stupid stories I had fallen for.

I raised immediate alarm but it was useless. Of course, the seller was nowhere to be found. The phone number he had given went straight to mailbox and his 'address' had been a worthless 'south behind the Kalumba junction" or some such nowhere. Nobody was willing to admit to have known him or know where he lived, though I’m sure some did but they wouldn’t rat on a fellow country-man, nor be held responsible by collective guilt, as would have been the case if they were relatives or friends.

We were cash strapped for months. My wife made unpleasant remarks. I owned a heated padparadscha that I could not offer in our own sales channel. I could have sold it locally but only with a heavy loss. Instead I carried it around for several years, until I was lucky enough to swap it for an unheated blue in Bangkok.

My first padparadscha was a terrible mistake but I learned my lesson. The next time I would be on the winning side. Read on under padparadscha over two carat.

Title 

Excerpt from my 2nd novel "Monkey Business in Kenya":


Negotiating a gem-buyer's week in Tsavo Natinal Park

"When we arrived at Zomo's home, a prosperous villa by local standards, more than a hundred men, no women, filled the inner courtyard.

Everybody jumped up and pressed forward. We came to a halt in a sea of bodies waiving bags and boxes with gemstones, holding up crystals and rocks. My skin tingled with a hunter’s anticipation.

For a change, Lizzy looked scared.

“These are all just miners, traders, don’t worry. It’s always like that.” I said.

“This looks like a riot.” Lizzy whispered.

Zomo honked, inching his car on, the security guards threatening the crowd with sticks, and slowly we made it to the entrance. There, we ducked from the car straight into the main house, like movie-stars chased by paparazzi. People jostled for position but nobody was allowed in, yet.

In the office, I sat behind a big wooden table, Lizzy by my side, Zomo and his accountant behind.

Zomo was going to get 5% off every deal, payable by the seller.

When all was ready, the tea hot, the pens working, money secured in locked drawers, dishes filled with water to wash rough, torches loaded, tweezers, lenses, pocket calculator, bags and boxes at hand, Zomo opened the door.

The first seller was a miner with hands like shovels, including the dirt. He smiled with a row of immaculate white teeth and emptied a bag of rough tsavorite onto the table.

I picked up the first stone, cleaned it in water, and shone a strong light through the gem to detect inclusions or cracks. One by one, I sorted through the pebbles dividing them into desirables and duds. I explained every decision to Lizzy, showed her good colors, clean pieces, nasty inclusions. She nodded bravely, though I was sure she could only understand half of what I said.

The miner sat across the table, smiling, patiently watching my every move, every facial expression as we discussed his gems.

After half an hour, I declared fifteen of his rough as undesirable and pushed them back towards the miner. The remaining ten pieces I pulled closer to our side.

Amongst these ten good pieces there was an exceptional three gram rough with a glass-like body and an electric glimmer inside. It would cut to perhaps 5 carats, a considerable size in Tsavorites.

I pulled the good ten closer to my side of the table. “Those I might take. How much?”

“Take all.” Said the man, pushing the bad fifteen a few inches into my direction and sweeping his hand over the two piles.

Understandably, he wanted me to buy all, not only his best, but I’d end-up with a set of cheap cabochons

“No, only these ten please. How much?” I asked again and pushed his fifteen an inch back.

He frowned, examining the good ten, holding each stone against the light and, DANG, selected the three gram rough which I wanted most and moved it a few inches to the side, still within my reach but separated from the other nine. He knew his business. Now we had three separated items to negotiate. 

He smiled his big white smile and pointed at the nine. “600 for those.”

“How much for all?” I motioned for all twenty-five.

His face lit up. “2000 for all.”

I threw up my arms. “Impossible! I can’t!”

Pure show.

He picked up my favorite, held it up, and proudly said: “This alone is 1000. Take the whole table for 2000.”

“I can take all for 1500. Half are no good!”

He groaned in despair, pulling his hair. Show!

This first deal of the week was most important: I had to balance my negotiation carefully, not too soft but not too hard either. This man was going to give the first news to those waiting outside.

If the others thought me a soft-skinned Muzungu with too much money to burn we would be having a hard time with every deal and end up paying too much all week long.

If, on the other hand, he would tell them that I was a tight-assed buyer without mercy, those sellers with good stones would leave rather than wait outside for days only to get ripped off. The longer a seller waits, the more desperate his cash situation gets. After all, he cannot work and his family has to eat.

Lizzy followed the tedious negotiation with big round eyes. Though it was half her money she did not ask for voting rights.

After much back and forth, I bought the good pile of tsavorites, including my favorite, for 1750. The miner paid Zomo 5% commission and we parted in good standing. He promised to come back with rubies. I hoped he was going to give me a thumps-up when he stepped into the waiting crowd outside.

The rough gems we sent to the Uncle’s lapidary for immediate cutting.

Lizzy sighed exhausted, obviously expecting a rest, but the next seller, actually a crew of three dealers, rushed through the door before she could intervene.

The three co-owned a big, but badly cut, ruby. I explained to Lizzy the ways of ruby, its hues, the cutting, and a million other things.

Thus, another round of grim negotiation began. Again and again, the three got into fiery arguments amongst themselves and had to step outside. Yet, they could never agree. This went on until the Uncle told them to get their act together now, or ‘come back another day’, which in our language meant ‘don’t come back’.

Zomo’s threat worked and I bought the ten carat egg-shaped ruby for 2,200 (…yes, those were the days… as I write in 2014 this stone would have cost $25,000, if you were quick and lucky).

Except for a brief sandwich at noon we haggled, bluffed, pokerfaced and counted money non-stop for nine hours.

At six in the evening, I looked out the shuttered windows. Even more people than in the morning stood waiting there.

I took Lizzy’s hand. “Can you do more?”

“No, No, I’m totally brain dead,” moaned Lizzy, her eyes blunt and starry, “I wanna go. Please!”

The Uncle went out to call it a day.

***

In Zomo’s car, Lizzy said: “I see rotating gems when I close my eyes.”

“Normal. That’s the job. It’ll get better, later.”

“I hope so. I can’t close my eyes or I’ll be sick.”

We got our car from the Maasai’s garage and drove through the pitch-dark park always aiming at the only light on the horizon, our hotel.

Since we had told the manager that we would be late, they had not yet called in the rescue squat. An all-you-can-eat buffet was open until 22.00 and we arrived at 21.45. The remains didn’t look appetizing but no refills were to be expected.

“Careful what you eat,” I whispered to Lizzy. “This is a ‘never-come-back-hotel’.”

“A what?”

“A standing joke amongst hotel managers: ‘Can poison the guests—they never-come-back anyway’.”

We avoided shell fish and skipped the meatball Massalla.

Next day, at breakfast, Lizzy complained that she had dreamed of gems.

We drove to the garage, changed into Zomo’s Land Rover and another day began, intense, arduous and yet exhilarating, at least for me.

And then another day.

On the third day, the forth seller, a tall Maasai in bright colors and with giant earlobes, offered a box of assorted so-so roughs, nothing special.

While I examined his stones, the Maasai pulled a fist sized hexagonal crystal in a reddish mauve color from his dress and, closely watching my reaction, rolled it on the table.

I briefly glanced at the giant crystal. Nerve-ends sizzled and I longed to touch the stone but I ignored the impulse, forcing myself to continue with the other roughs in due order. Any extra attention would double the crystal’s price.

Lizzy, however, pursed her lips, took up the crystal, studied it and asked something I can’t remember. Perhaps for the first time I ignored Lizzy’s question. The Maasai immediately caught the irregularity and smiled, knowingly. 

I had made a mistake but it was too late. Cursing inwards, I worked through the rest of the box.

Lizzy put the rock back on the table, shrugged.

After selecting a few roughs for negotiation, I took up the big crystal. The sizzling in my brain returned with fresh intensity. The stone looked and felt like a spinel but strangely something was amiss, or more precisely something was too much, did not belong there. My blood pressure went up. I glanced at the seller. He was a proud warrior in the prime of life, fighting scars on his face, and surly able to detect the accelerating heartbeat of an opponent.

The crystal was exceptionally clean with only some growth lines and a few inclusions.

I switched my balance from carat to gram and leisurely threw the crystal on it: 133 grams. A quarter pound! A remarkable size that would cut into over 100 carat. A 100 carat spinel was an exciting find.

However, my hands didn’t shake because of the size but because this was not a spinel. I clearly saw light and shadows splitting inside the stone. Spinel does not double-refract.  I turned the crystal this way and that, shone light in it, scratched its surface and weighed it again.

Then, as if by chance, I laid it onto a paper filled with scribbled numbers.

I tried not to stare, but there it was! The crystal reproduced the numbers beneath, clearly doubling and mirroring them. This stone was double-refractive. Spinel, however, is single-refractive!

In a smaller gem I might not have noticed but this giant’s double-refraction was visible to the naked eye, without further testing.

If this was true, I was looking at one of rarest gems in the world: a Taaffeite; and what a Taaffeite! Giant, clean and not badly colored. 

‘Something special: Peter!’ Here was serious business. My throat dry, I dared not take up the tea for fear of spilling.

A world record gem. Patience!

Casually, I laid the Taaffeite with the other rough and thus formally opened negotiation over the complete lot. But the Maasai, again with his knowing smile, pushed the crystal to the side, singling it out.

So, the Maasai knew that I knew that he knew the crystal was special. However, I was sure he thought it only especially big, nothing else. He did not know what was spinel or sapphire or garnet much less could he ID a Taaffeite. 

We negotiated a bit for the box of small roughs, just fishing around, pretending not to be concerned with the giant rock on the table, though it screamed for attention.

After a while, I again picked up the crystal and held it like a hand ax. “Big enough to kill a lion.” I said, laughing… alone, like Eli.

Everybody else frowned. Especially the Maasai did not appreciate the reference and scowled frightfully.

I felt like a bumbling tourist and muttered some excuse.

The Uncle helped with a few soothing words in Swahili and the tension subsided.

“Uh, how much then?” asked the bumbling tourist.

“Ten thousand.” Said the Maasai with a grim smile.

The Uncle laughed politely. Lizzy smacked her lips. Even for a 133 gram spinel this was an unusual ask. More money than a whole Maasai tribe might earn in a year. I would have expected a few thousand. My lion joke, it seemed, had blown up the price.

I steadied my hands and poured fresh tea, winning some time to consider: Seriously big gems are rare but often hard to sell because they evade the jewelry market. Who wants to have a quarter pound of rock around his neck, even it is a sapphire? Often such stones are broken up into smaller pieces and sold separately.

However, if this was in fact a Taaffeite, and I was 95% positive, then the laws of physics or jewelry did not apply. A world-record gem gets international press, is sought after by the museums and will be an honor for the owner; for Peter. But I had to have his back-up for such a price.

I pretended to receive a call on my mobile and walked off into a side room. There I called London and was lucky to get Peter on the line.

“I have a big Taaffeite. Very big. You interested?”

“Sure am.” He said without hesitation.

“Can you wire 50k to Kenya?”

“50? That big?”

“Over 100 carat after cutting.”

Awed silence in London.

“It sells as spinel.” I added.

“Deal!” Peter said.

“I text you my bank data in a minute. I need cash today.”

“You got it. My banker is fast.”

That done, I went back into the office, sat down, savored the moment, pointed at the big crystal and said: “10.000 is OK.”

The Uncle and his accountant gasped. Lizzy stared, mouth open.

The Maasai looked first puzzled, then happy until doubt crossed his face and he slapped his forehead, finally cursing loudly.

I had accepted his price without negotiation. That could mean only one thing—he had asked under value!

He moaned, fidgeted on his stool, looking for a way out, a chance to modify the deal. Honor forbade him to pull back or raise his price. Also, 10k, after all, was a fortune here. He definitely wanted the money. He would not refuse and run home but he desperately wanted to squeeze some extra out of us without losing face.

He glanced around the room, searching for help, but everybody stood firmly on our side, ready to enforce the unwritten rules of the trade.

Then, his eyes flickered.

He pushed the crystal back to the other rough, all onto one heap, thus formally reopening the negotiation. Not exactly a kosher move but understandable.

“Can, please, make a new offer for all?” He begged with his best smile.

At that moment, dramatically, the power-supply broke, leaving us in the dark. Before the generator kicked in, the lights flickered on again.

The Massai’s smile had frozen.

I dragged the tension just a bit longer, looked at Lizzy, nodded towards the Uncle and then slammed a hand on the table: “20.000 for all.”

The Maasai’s mouth opened and closed in disbelief, then he whooped and jumped across the table to hug me with his intense, distinguishable African body-odor. I fought him off, laughing.

“But I need a promise!” I said.

“Anything. My honor!” he said.

“Don’t tell! That I buy spinel at such prices I mean. This is only between us. Promised?”

“Promised, Sir, promised.” And he hugged me again.

“I hope you know what you’re doing.” Lizzy whispered.

I nodded bravely.

While I counted a big stash of bills, the Maasai pledged the his ancestor’s and his tribe’s honor on total discretion, guaranteed the health of my grandkids, again and again kissed the totem hanging around his neck, pulled a few more roughs from his dress and lay them with the others.

“For free. For you.” He beamed.  

Peter sent the 50k on the same day. Pocket-change for him, I imagined.

Lizzy made two more bank runs to get cash while I continued to splurge on gems from morning to evening, day-in-day-out. I immediately re-invested the, so far only assumed, profit from the Taaffeite and extended the buyer’s week into ten days.

Once in hunting mode, with dozens of sellers lingering in the Uncle’s courtyard, I, like a compulsive gambler, could not stop buying until the money was gone. Contrary to the always unfortunate gambler, however, the gem-dealer keeps the loot and, if he is a good buyer, he will make a profit… and go on new binges. Thus the circle closes into a life-time of high intensity buying, followed by near-death experiences with empty bank accounts and bare survival, until enough sales justify the next buying trip.

A cautious gem buyer (perhaps an oxymoron) might have stacked away Peter’s money for a rainy day but then a cautious person may never become a successful gem dealer.

When we had only six thousand in cash left Lizzy began pestering me to stop. Down to five thousand I finally tore myself away.

We had bought a fine selection of gemstones, from the odd yellow citrine to venomous green tsavorite to steel blue and green sapphire, from stones retailing for a mere hundred dollars to very expensive rarities.

 

[1] ‘Rough’ here means the gem as it is found in the ground, before cutting and polishing.

[2]  Gems that are too included to display much brilliancy are usually polished into rounded spheres, called ‘cabochons’.

[3]  This symbolic pushing around of gems on the table is an integral part of negotiation in our trade, especially when common language is limited.

[4] I know traders who arrange their buying weeks in such locations that the seller can’t go home easily. Nasty trick.

[5] This stone’s unattractive egg-shape darkened one half into brownish Bordeaux red while the other half seemed to be more pink than red. A good recut could symmetrize the stone, smoothen its color and balance the luster, but in the end we would have a five carat ruby instead of a ten carat. Of course, the sellers did not want to hear such details. They had a ten carat ruby and that was a valuable size.

[6] Maasais collect gems while herding their cattle. He was the tribe’s ‘gem-man’, selling what his clan had gathered and probably an important man in his ‘village’.

[7] ’Double refraction’ is an optical phenomena in some gems. Too technical to explain here. Please google if you’re interested.

[8] Allow me to explain for the casual gem friend: Spinels are plentiful, not as plentiful as diamonds, but they are a common gemstone in jewelry, always have been. Thousands of spinels are going to Bangkok every month. But only one in a thousand, if at all, is a Taaffeite. Most are not particularly pretty, they tend to be muddy pink, or brown violet, small and unassuming. Hence they are often overlooked. Misidentified as spinels they go under as worthless side-stones, perhaps are even thrown out. ID-ed as Taaffeite, however, they are so rare that I myself had only seen one or two in a lifetime. If I remembered correctly the biggest Taaffeite ever found was 50 carats or so. Most have been mined in Sri Lanka, but it was not surprising to encounter them in Kenya since the Sri Lanka and East Africa share the same geological past.

[9]  If you think I rip-off the noble savage by not telling him what he had found, I suggest you never start your own business. My potential profit here is called ‘arbitrage based on information asymmetry’, one of the most common value-adding sources in any trade.

[10] Whether he would share the money with his tribe, I couldn’t control. This is as good as ‘fair trade’ gets in my business. ‘Fair’ may look different in the coffee- or tea-trade or even in some more organized corners of the gem business, but here, in the jungles and steppes, amongst wild-cat miners and day-traders, paying a good prices is all you can do. I refuse to deal with people who brag how cruelly they squeeze their suppliers but I cannot micro-manage beyond my own business.

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