Why now is a good time to buy diamond miners

Demand for the gems is set to outstrip supply, making it a good time to buy miners, says David J. Stevenson.

Diamonds
Global diamond production is at its lowest since the 2008 financial crisis.
(Image credit: © Getty)

“Diamonds are a girl’s best friend,” sang Marilyn Monroe in the 1953 film Gentlemen Prefer Blondes. And who, regardless of gender, wouldn’t want to own the renowned Pink Star diamond? This stunning 59.6-carat (the industry’s diamond weight measurement unit: one carat equals 200 milligrams) gemstone sold at auction in 2017 for $71m, the highest price ever paid for a jewel. However, stockmarket-listed diamond shares could also be a great friends for investors. To understand why, let’s start at the beginning.

Diamonds began to form in the ground around three billion years ago and are the hardest natural material known to man. They are highly effective at conducting heat, and expand only slightly in high temperatures. They’re also resistant to most acids and alkali.

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Contributor

David J. Stevenson has a long history of investment analysis, becoming a UK fund manager for Oppenheimer UK back in 1983.

Switching his focus across the English Channel in 1986, he managed European funds over many years for Hill Samuel, Cigna UK and Lloyds Bank subsidiary IAI International.

Sandwiched within those roles was a three-year spell as Head of Research at stockbroker BNP Securities.

David became Associate Editor of MoneyWeek in 2008. In 2012, he took over the reins at The Fleet Street Letter, the UK’s longest-running investment bulletin. And in 2015 he became Investment Director of the Strategic Intelligence UK newsletter.

Eschewing retirement prospects, he once again contributes regularly to MoneyWeek.

Having lived through several stock market booms and busts, David is always alert for financial markets’ capacity to spring ‘surprises’.

Investment style-wise, he prefers value stocks to growth companies and is a confirmed contrarian thinker.