 Good day fellow investors! There are some very interesting things that happened in the diamond sector. So in this video I'll analyze the industry, the diamond industry, what is going on with the supply and demand of diamonds. And I'll discuss two interesting diamond investments that have a good yield and could explode when what is going on there actually happens. So keep listening and let's start with the diamond industry. A few days ago Bloomberg wrote an article how diamond stocks have been dropping like a stone. However diamond prices didn't drop. So all these stocks have had individual issues that can and can't be resolved. So it's very interesting because diamond prices are stable and stocks are dropped which means there must be some burdens. Also Bloomberg says the sector is oversold so now is the time to buy diamonds, not when the sector is overbought. A look at the diamond industry, the biggest diamond producer is the Russian company Alarosa followed by De Beers, Rio Tinto, Diamond Dominion and 28% of smaller producers. What's very interesting is that global sales, diamond sales continue to grow at a steady pace of around 4% per year. The largest market for now is still the US but India and China are growing and expected to grow at very very healthy growth rates of above 6%. This means that there will be plenty of demand from diamonds and as we have seen in our UPi analysis video the number of high net worth individuals is growing in China very fastly and they I'm sure will buy diamonds. On the supply side and this is what makes the thing interesting, supply is expected to grow only at 2% until 2019 and then remain flat for the next 7-8 years. This means that there will be a supply gap arising in the diamond sector from 2018-2019 onwards and this should push diamond prices higher so it's a very interesting sector to invest especially now that stocks are cheap. How to invest in a miner? Diamond companies are diamond miners so you have to see what are their mining costs, what is the quality of their ore, where they search for diamonds, the Kimberlid ore, where is the mine, what are the risks, how big is the mine, how big can it be, what is the potential, what are they finding and it's a very very interesting however not at all a stable environment. If you look at mining costs African diamond mining companies have the lowest cost Alarosa is also there the Russian company traded on the Russian stock exchange and Canadian diamond mining companies have higher costs so if you look at investing if you buy the low cost then if diamond prices increase you will make the smallest profit because they're already profitable and their margins won't increase that much if you buy the Canadian mines and diamond prices increase their profit margin will increase significantly which will make also their stock prices increase. Let's look at two diamonds and the first thing to show is that one diamond can change the game for a company. This is the Lacedila Rona 1109 carat diamond that was found by Lucara. It took them a year to sell and that's one reason why the stock price dropped so much but it was sold for 53 million that's a quarter of the usual revenue from Lucara. Nevertheless the stock price dropped like a rock from 417 to the current 2.47 so the company is profitable they are doing a good job mining what they have at a nice gross profit margin and if they find more of those big gems it could really really shoot up the stock price. In the meantime you can enjoy a 4% dividend which they pay out quarterly so if you want to position yourself in the diamond industry Lucara is a very very interesting stock African miner as I said and owned by the London family so if you want to invest with them into diamonds then Lucara is the way to go. The second company that's very interesting is Dominion Diamond Corporation it's a purely Canadian miner whose success of the stock of course purely depends on its projects. They're developing four new projects free at Ekati continuing the development of the Diavik mine they expect their sales in Ibita sales to double Ibita to triple so let's say earnings double and they could come to earnings of around two dollars per share two and a half if prices go higher which are very very high earnings for a stock that's trading at 14 dollars and the production is expected to last for a while so very interesting stock to look at if you want to position yourself into diamonds. Their stock price unfortunately this growth is already acknowledged by the market but there might be more more growth ahead so interesting to check. I will finish with something very interesting we have seen a supply gap opening so if you're planning on buying a diamond for someone you should do it before 2019. It isn't that romantic but you can buy a bigger diamond and bigger diamonds are always a romantic. Thank you for watching click like if you like the content let me hear what you think about the diamond industry and I'll see you in the next video.