I propose the following short prescription for the diamond industry’s long-term recovery:

First and foremost:

A true leader must emerge from deep within the industry at the level of primary production.

(2) This leader must have the ability, confidence and commitment to squeeze supply when necessary.

(3) This leader must recognize and solve the question of “enduring value” at the retail jeweler level.

(4) Retail jewelers must be trained and retrained on true luxury and understand it inside and out. This goes far beyond anything attempted by the industry to date. It is the cornerstone to the health of the industry medium and long term. Isaac speaks to this when he mentions irrational purchases.

DeBeers had the formula right prior to the 1980’s, but steered off course…they need a map and they need to learn to read the signs

(5) The practice of ‘Memo’ing goods, except in the instance of a 10 days special request for an established client must be relegated to the past.

(6) Jewelers must gravitate to partner suppliers who can work effectively with them to eliminate bottlenecks in supply.

No diamond should sit in a jewelers inventory for extended periods of time.

(7) Primary polishers must invest their profits (which means they must first have some profits) into their business to improve infrastructure (equipment) and train a new generation of diamond polishers. If a business is profitable then good business practice will lead those who survive to take these steps independently. Those who refuse to move forward with innovation will eventually close their doors.

(8) Consumers should be allowed to rediscover the hidden value of diamonds – The essence of self expression. Being able to express in action what one can not express in words.

Forget the 4C’s. Forget about diamonds as an investment. Diamonds are a symbol of the irrational – LOVE.

(9) Bank debt must be reduced significantly. There will always be a necessity to work with others money, but it is out of control.

In my view the industry debt is most likely 5-7 times more than is healthy.

(10) Banks must be enabled regain confidence in the price of rough and the downstream distribution (this is once again a a function of strong leadership and even political guarantees by governments whose revenue depends on the diamond industry’s health).