tag:blogger.com,1999:blog-7294165939647321702.post8057049997372271885..comments2024-03-28T13:45:43.362-04:00Comments on <center><a href="http://www.barelkarsan.com">Barel Karsan - Value Investing</a></center>: Diamonds: An Investor's Best Friend?Saj Karsanhttp://www.blogger.com/profile/04493152766022812984noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-7294165939647321702.post-87471535577241800142009-08-15T18:29:25.117-04:002009-08-15T18:29:25.117-04:00I agree with you Saj.
Beyond its poor positioning...I agree with you Saj.<br /><br />Beyond its poor positioning in the value chain, I would add that their pitiful historical cashflow generation probably partly explains the low market cap to net working capital ratio.<br /><br />They could be bleeding cash for a while.<br /><br />I also dislike the characteristics of the product they sell. Diamonds' value rests primarily in people's perception that it retains value, i.e. it doesn't generate any cashflow. This circular feedback loop can fundamentally collapse. <br /><br />It would be interesting to look at how much diamonds are added to the world inventory every year and the minimal portion that is destroyed.Berihttps://www.blogger.com/profile/12000582241691689554noreply@blogger.com