King of Diamonds

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“I learned very early on that if you give your customers the best, then you will have the best customers,” says Graff. “I myself am happy to pay higher and higher prices for rare stones, and so are my clients.”

Although the value of diamonds dipped in the early 1980s owing to what Graff calls an influx of “bad buyers”—pension and investment funds that were buying diamonds as a commodity or an investment as opposed to buying them the way he does, as unique treasures to be coveted. “They just stockpiled them away,” says Graff. “They had no interest in them as stones to be treasured and loved and worn.”

Eventually, in the 1990s, those diamonds that were “stockpiled” came back on the market at a just price. Today Graff estimates that the values of fancy and rare diamonds have gone up as much as 60% in just the last year. “The world is a wealthy place. It's lateral wealth too,” he says. “There's wealth everywhere.”

One of Graff's favorite stones is the Graff blue, an extremely rare, 3-carat round blue diamond that he has bought and sold three times over the past 25 years. The first time he saw it was at auction, where it sold to someone else for $180,000. Years later he spotted it on the hand of a client but couldn't buy it until after the client died, and his widow offered it to Graff for a much higher price. He eventually sold it to a Japanese client who offered $1.5 million. Fifteen years later, the same client wanted to sell the blue diamond for $2 million, and Graff bought it back, repolished it and decided to keep it. But he couldn't resist an offer for $3 million. “I'm a trader,” he says with a shrug. “But my dream is to buy it back someday.”