Odd Lots - The Jeweler From Uncut Gems Explains Why People Go Crazy For Gold And Diamonds

Episode Date: February 24, 2020

One of the best recent movies was Uncut Gems, in which Adam Sandler plays a Diamond District jeweler with an addiction to gambling and risk. It turns out, one of the workers in Sandler's shop was played by an actual, real-life jewelry dealer. On this week's episode, we speak with Maksud Agadjani, the founder and owner of TraxNYC, which sells a range of items, from traditional bracelets and necklaces to highly customized, 3D-printed items for celebrities. Agadjani talked to us about the movie, the business of gems, and why people will spend wild sums on his flashy items.See omnystudio.com/listener for privacy information.

Thanks for listening to Odd Lots. Follow the show on Amazon Music for more future episodes or just ask, Alexa, play the Odd Lots podcast on Amazon Music. Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute. Capturing value and fixed income is not easy. Bond markets are massive, murky, and let's be real. Lots of firms throw a couple flashy funds your way and call it a day. But not Vanguard. At Vanguard, institutional quality isn't a tagline. It's a commitment to your clients. We're talking top-grade products across the board of over 80 bond funds, actively managed by a 200-person global squad of sector specialists, analysts, and traders. These folks live and breathe fixed income. So if you're looking to give your clients consistent results year in and year out, go see the record for yourself at vanguard.com slash audio. That's vanguard.com slash audio. All investing is subject to risk vanguard marketing corporation distributor.

Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Wisenthal. And I'm Tracy Allaway. Tracy, I have an apology I think I have to make too. Oh, this is exciting. Okay, go on. Well, you know how like I sometimes accuse you of being secretly a gold bug and stuff like that? And sometimes I, like, troll you nicely about your dad being a gold bug and stuff like that

and being super into hoarding physical gold and jewels and gems and stuff like that. I'm not sure it's trolling if it's true in the case of my dad. He definitely is a gold bug. But what exactly are you apologizing for? No, I've also accused you of, like, secretly being that even if you don't admit it. I'm really not. Look, I'm not a gold bug, but I'm not. I'm not going to turn down when people give me gold as a present.

Okay. Okay, that's fair enough. But you're sort of, I don't know, okay, I'll move on. But I've always sort of suspected you have those leanings. Anyway, the reason I have to apologize is because I'm coming around to that view myself. And I myself, I am kind of becoming a closet, or maybe out of the closet gold bug myself. Isn't this like the third time you've changed your opinion on gold? I always go back and forth. But this time, it's actually specifically because of the guest that we were, that we are going to talk to on today's episode. I recently started watching his videos on Instagram and he is such a compelling salesman for gold and jewelry and gems that I'm kind of changing my mind on the whole thing and I want to start getting into hoarding gold.

Well, look, the field of people selling gold is kind of a crowded one. So I'm really curious what the sales pitch is exactly here. It must be a good one if it's changed your mind again. Well, you know, for like the last 10 years since you and I have been in, you know, covering finance, most of the people advocating gold are like these sort of angry, old-fashioned types like Peter Schiff and they like spend all their time. railing against the Fed and honestly like it's kind of a tiresome but I've been my eyes have opened up to a different case for it that I find to be far more compelling what's the case well let's before we get to that exactly let's just backtrack a little bit um I know you're in Hong Kong but did you see the movie uncut gems I did it was really really good like pretty stressful at times given it's about this New York jeweler whose life is basically spinning out of control due to a gambling addiction, but it's really good.

It's really good. It's really stressful. I would say it's probably my favorite movie that I saw in the last year or two. I loved it. I want to see it again. But anyway, on today's episode, we are actually going to be speaking with a person who played a role. He was an actor in the movie and he is a real-life jeweler. So I know who you're talking about. It was the behind, the counter sort of jeweler or assistant in the main character's shop, jewelry shop. Right, exactly. So for those who don't know who haven't seen it, A, you should see the movie, but Adam Sandler's character plays a jeweler in New York's Diamond District and one of his employees, the character Yossi, is actually a real-life jeweler who's been in the game for a long time

and he's here now. And we're going to talk to him about what the best. business is really like what the movie got right and wrong in why people love jewelry and gold so much. That sounds great. Let's do it. All right, let's do it. So without further ado, I want to bring in Maxud Agajani, he's the CEO and founder of Tracks NYC. He played the character Yossi in the movie. He's a jeweler. He sells jewelry to rappers and others, much like the Sandler character in the movie. Maxud, thank you very much for joining us. Thank you for having me very much. Thank you.

How did you get into, how did this happen that you got a character in this movie and that you're an actual jeweler who is in Uncut Jems? Well, listen, they had this complicated scene in the showroom in Uncut Jems, and they needed to make it look like an authentic place with somebody who looks like a jeweler. And there's not that many people in Hollywood apparently that can fill that role. So they started looking for New York City Jewelers on Google. I guess. I popped out. They auditioned me and I got the part and I did the scene for him. So how did you get into jewelry in the first place then? Maybe we should back up. Like how did this

become your career choice? How did I become an authentic New York City jeweler that they could Google and find? Well, in 2004, when I graduated high school, I just needed to start making money and I saw that there was a market that was opening up on the internet, on eBay. So I started photographing jewelry from a jewelry store I found on Canal Street, downtown here in Manhattan, and putting it up on eBay. And when I would sell a piece of jewelry, I would go and buy that piece of jewelry and chip it and keep the difference. And that wasn't particularly easy thing to do. It's easier to say now than it was to do back then, but I, you know, crowbarred my way into the industry.

and here I am. I didn't know I was going to be here 15 years later, but I'm here. And now, like, you're a legitimate star. I mean, beyond the appearing in the movie and all this attention, you and your jewelry, your shop, you sell to stars, you sell to rappers, your website's amazing, it has all kinds of, not sort of traditional jewelry like chains, but, you know, interesting, like diamond-encrusted, you know,

whatever they are. That's right, cartoon characters and pieces, and Jesus heads and all sorts of stuff that whatever the market demands, I try to supply. How did you get into that aspect? So how did you go from essentially flipping cheap jewelry that you found on Cannell Street on eBay into creating your own pieces and finding a high-end market? If you want to increase your profit margin, you're going to have to learn how to manufacture rather than buying from wholesalers. So little by little, I learned how to manufacture, cast the gold, set the diamonds, get the diamonds from the diamond dealer for the right

price and, you know, and make a couple of honest dollars, as they say. So I have so many questions that I want to ask you, but I want to get to the buy case for gold or for gold jewelry because, like, I certainly have never thought of buying a gold chain as necessarily an investment. But certainly on your videos and on your website, you talk a lot about the investment case for gold. Why did you decide to take that approach? I'll tell you exactly why. Well, right now I'm wearing a chain that I bought in 2007 that was around when gold was around $700 an ounce or so. Okay, right now it's about close to $1,600 an ounce. Okay, so if I scrap that chain, the very same chain I'm wearing now, I'm going to get more

than what I paid for it back then by a significant degree, almost double. And, you know, for wearing a chain, that's pretty good a return on investment, you know. So you just can't lose by buying that type of product. And when I convince my customers or explain to my customers that if you're going to buy something, a luxury item, you know, there's a lot of options out there. You could buy a Gucci belt. You could buy this. You could buy high-end fashion, high-end brands. Not a single one of those is going to give you a return on investment in 10 years.

So it's really a no-brainer. Gold could go down over the next 10 years, and it has at times. It certainly has, and everything could go down, but from the experiences and from everything I've seen, I don't think it's going to go down under $1,000 an ounce in my lifetime. I don't think it's going to happen. So one thing in your videos, which I was really drawn by, is you do seem to combine both the sort of luxury goods pitch. And you also talk about the fundamentals of gold. The first video I saw, I think, was you had a chart of gold,

and you were looking at it right around the time that there was the strike that took out Soleimani in Iran. And pitching jewelry as an investment around world events, talk about what drives them. Is that a unique thing that you came up with? Are other people in the Diamond District in your business making the pitch that way? No, they're not making the pitch that way, and it's unique. And if you want to make any money or stand out in any way and you don't have anything unique, it's never going to happen. You're going to have to come up, especially in the social media podcast world that we're in now. You're going to have to come up with some information that people find useful.

So essentially what I try to do is I've tried to put on a show and the commercial break is my own merchandise. That's just pretty much what it is. Other people sell T-shirts with their podcast. I sell jewelry and kind of sell a podcast. with the jewelry, but the jewelry is sold on the podcast, whatever works at this point. We should sell T-shirts, Joe. Yeah. Or we should sell jewelry. Or jewelry.

Yeah. So, Maxud, one thing I wanted to ask is, and this might be difficult to answer, but what percentage of your customers would you say are drawn to the investment thesis that you're sort of, or the investment pitch that you're putting out there versus people who just want to buy nice jewelry? Well, you know, to be quite honest, I'm awakening them to that concept because they never considered it as investment pieces. But some of the people in hard times, they get their money back on some pieces that they buy. And it's common knowledge that you're going to get back more on a gold chain than on a diamond chain in certain circumstances. And they were always curious about that information, the people that had life experience, right?

The young kids that just want to get iced out and throw away all their money, they might not really care about that. But people are already in their 30s or in their 40s, and they've been buying jewelry for a long time. They want to get what they pay for, and they're looking for that information. And nobody was filling that void, so I filled it in. And along with those people that were looking for that information, I'm awakening a lot of other people to the fact that, you know,

there's a price and then there's value. and, you know, that's a new concept for them. So you talked about how you started essentially moving up the food chain, so to speak, by contacting and getting relationships with diamond wholesalers and making your own jewelry. And one of the things that struck me in the movie Uncut Gems was the main character, Hard Rattner, Adam Sandler's character. He was always doing these deals with other people, and they're all word of mouth, including things like briefly pauning a Super Bowl ring for the week so he could get some cash so he could make another deal.

And the person who gave him the cash would quote him a price or quote him in interest rates. And it was all just sort of word of mouth trust. Is that an accurate characterization of the industry in which everyone to just sort of trust each other at their word? And that's the key thing. Yeah, it's very accurate the way they depicted him wheeling and dealing. and I've been in those types of situations myself. All right, as much as one wouldn't like to admit it, I would. Sometimes you have to close one deal.

You have to have some value in some dead stock. You have to put it, pawn it for a week, go get the other watch, ice it out, go get it to the customer, then get the money, go bring it back, and so on and so forth, and hope you don't trip up along the way. And once you develop a reputation, listen, if you have, you know, a bunch of gold chains, $30,000, and I have a client for it, I'm going to come by and you have to decide whether I'm going to go and grab that inventory and go to the airport and fly away and never see you again or going to go and sell it to that client that I have while you have the

inventory that you want to move. And you have to wheel and deal and you have to work with people who you trust. And that is just not much evolution on that behavior since maybe ancient Babylon. on. You don't really know who you're trusting. You just get to know these people and you get a feel for their personalities and, you know, the little by little business experience will guide you. So Joe mentioned the pawning of the Super Bowl ring in the movie and you just mentioned the idea of maybe sort of selling on something before you've received the money or sort of like adding leverage to your deals. And there does seem to be an ecosystem of finance and lending and credit built around the jewelry business. Why do you think that is?

Like, why are pawn shops and gold and jewelry intertwined to that degree? Well, I mean, the materials are expensive, right? So when you're walking through the diamond district, you're going to have people hounding you from the street that are saying, come into this shop, coming to that shop, because you might be a high value person. worthwhile going through all this trouble and following a person down the street and bothering them maybe to get them into your shop, right? You might not do that in front of the supermarket or something like that, but you'll do that in the Diamond District because that person might end up buying something that's $50,000 and then the store owner is going to give you a commission of $500 and so on

and so forth. So just the values of the items that you're dealing with create a whole new ecosystem. And things move quickly. So you're not going to be able to do a lot of paperwork and things like that. So there's just a whole different environment that you can learn from, especially the way economics move, that you're not going to find in other industries like banking or something like that. And then, you know, people overexert themselves, right? People make mistakes. That's why economies fail for the most part.

And it happens on a state level and it happens on an individual level. People buy something they can't afford and they think that they have a hard times and they have to pawn it and they think they're going to come back in a month and they don't right and they and on and on it goes and it happens with jewelry customers and jewelry business owners as well right there's people that have been essentially printing money and doing great in the 90s and in the early 2000s that are now pawning their inventory or people that were holding out when the gold price was at its peak and were raising their prices, changing their tags, and now that are desperate to scrap those pieces, and, you know, just people make mistakes, they make miscalculations. And with the products like gold, which has its own dynamics, diamonds, which have a completely different dynamic, and some of them are combined, you know, it just gets crazy. So one of the products for sale in the movie that's sort of very memorable is Adam Sandler's character, he has like a diamond-encrusted

Furby. That's right. And Tracy really wants one. Do you have any of those in stock right now? Those who were made out of brass in the film, they didn't actually make them out of golden diamonds. So they might turn her neck green if you're going to wear it too long. From an investment standpoint,

on your website, you sell some that are just like basic chains and then some as you said, like diamond-encrusted cartoon characters. Are those riskier the sort of more custom ones because, you know, it's fad, like maybe like right now people are probably asking for like diamond-encrusted baby yodas and stuff. Something like that. But like in two years people might forget about that. So from like an investment standpoint, are those custom pieces a little risky? For sure, for sure.

I mean, for a consumer standpoint, yeah, it's definitely a luxury item. Yeah. Okay. And from my standpoint as a manufacturer, well, the way it usually works is let's say you make a hundred pieces and you want to get your money back by the time you sold 50 of them. All right? And the rest of them, if they, all right, you got your money back by number 50. And the rest of them is your profit. Now, if you sell out of those 50, 20, you made a profit and the rest you scrap and you get back in your materials if you're stuck with them over a period of time. And that could be dicey, especially in this economy, you know, that people don't have that type of spending power to consume these types of goods. So a lot of jewelers are getting stuck with this type of inventory. And it's really a tough

business now more so than it ever was. Can you give us an example of you getting stuck with a particular inventory, like one that was memorable for you? One that was memorable for, well, my safe is filled with stuff that I'm stuck with, so to speak, but I've been pretty good and not getting stuck with too many pieces. So the pieces that you're stuck with are the ones that are the least desirable. The most desirable things that you manufacture are going to be the first to go, and the least desirable are going to be stuck with. So the stuff that I'm stuck with is the stuff that doesn't really attract anybody, just rings that, you know, are off-putting and things like that. But the good pieces, you know, I would make characters out of video games, Street Fighter, or you'd make a genie coming out

of Aladdin's lamp, but those are all gone and people enjoyed them and I don't have them anymore. Today's show is brought to you by Vanguard. To all the financial advisors listening, Let's talk bonds for a minute. Capturing value and fixed income is not easy. Bond markets are massive, murky, and let's be real. Lots of firms throw a couple flashy funds your way and call it a day. But not Vanguard. At Vanguard, institutional quality isn't a tagline. It's a commitment to your clients. We're talking top-grade products across the board of over 80 bond funds, actively managed by a 200-person global squad of sector specialists, analysts, and traders. These folks live and breathe fixed income. So if you're looking to give your clients consistent results year in and year out, go see the record for yourself at vanguard.com slash audio.

That's vanguard.com slash audio. All investing is subject to risk vanguard marketing corporation distributor. So if I came in tomorrow and I said, you know, I want to get a gift for Tracy. I want to get her that diamond and crusted Furby. What would you require it? What would be the process? I will, maybe. What would be the process?

What would you expect of me? Do I have to like put money down? Like, how is the process? I'll explain exactly what the process is. So if you want to custom manufacture anything, you're going to have to put a deposit right down to so we could start making the model of what it's going to look like on a computer in 3D.

Once that's done, all right, so you put $1,000 down. Let's say you have a $10,000 budget on whatever you're manufacturing, whether it could be a custom engagement ring or a Furby piece or Zodiac, whatever. So you put $1,000 down. We show you what it's going to look like. We do all the calculations, how much it's going to weigh, how many carrots it's going to be, and then you have to put a production deposit down,

which is going to be around another 5,000, 4,000, and then we finish it, you see it, and you finish paying for it, you wear it, Tracy's happy, you're happy, I'm happy, Bloomberg's happy. I'm not sure Bloomberg's happy. I'll see what happens if I try to expense that, but if all of us are going to be happy,

I think we have to do it, Tracy. Make it gold-heavy and you'll be good. I will be the happiest of all, so yes, we should do this. So you mentioned 3D printing just then, and in watching some of your videos, that definitely comes up a lot. How important was 3D printing or how much of a revolution was it for the jewelry making industry? Like, how did people make these custom pendants, whether it's Furbys or Baby Yoda's or Jesus Heads or whatever? How did they do that before?

And did it become more popular once 3D printing came into being? well they were doing it by hand so they take a piece of wax and carve it out by hand and the waxes that they would make were far more primitive than what you could make on a computer now and you know the complicated things like back uh you know however a hundred years ago or so like a faberge egg that was stuff that was done by hand and that was extremely difficult to do you'd have to get an incredible craftsman to do that now you could make that type of stuff to even higher quality and higher detail on a computer So, you know, it's a world away.

And what you could manufacture, the jewelers have really not tapped into it just yet to the capacity that it could be. Because your capabilities are limited by your imagination with this machine that prints out, whatever it is you came up with. So, yeah, I definitely recommend people should check out your Instagram and check out the 3D printing videos because they're really cool. Are you rare? Like, if you were to go to other shops in the Diamond District, is that still something that most of them, haven't gotten into? They don't have, well, you have to manufacture to a high degree to own the 3D printer. The 3D printer I just bought, and I just bought it a couple of months ago, was about $60,000. Okay, and we did some research, and we got a pretty good one, and so on and so forth.

We got to learn how to use it, first and foremost. It's not like the printer you have at home. There's some maintenance there, and the materials you got to buy, and so I had a girl that knew how to do it, so we were able to make that leap. And that's, pretty forward thinking. The average jeweler's not going to have that. The manufacturer might have it, but it's still new technology. So, you know, grandpa's not going to be able to tune into it that quickly. And I'm a more a little bit, I guess, as far as jewelers are concerned, on the younger side. So I'm trying to use any advantage I could get. And that's definitely a big one. This feeds into something else that I always wondered about. But if I buy a piece of jewelry,

what percentage of it on average, I guess, is going to be the actual labor cost versus the input cost of the materials like gold and diamonds? Well, that depends who you're buying it from. If you're buying it from Tiffany and coal, let's say, for example, silver is about $2 a gram. So don't do much more math than that when you're going in there. I don't want to disparage the entire industry. but when you're going to buy a shirt or when you're going to buy something, if you think about the cost of the material versus what you're paying for it, it's not fair to apply that to the jewelry business too much,

and I'm the only one to blame for that because I started making that application for people, you know, what the value is. But there's a significant difference. And especially for the most part, you're paying for branding. Okay, you're going to Cartier and you're buying a gold bracelet and diamond bracelet, but you're paying more for the name Cartier. You're paying more for the name Tiffany and Co. That's why there is a Diamond District here

because once people realize, okay, I bought this one-carat, platinum ring for Tiffany for 20,000, but the materials to manufacture that ring cost $7,000 or $8,000 in the Diamond District, and the materials are really $4,000. I mean, you do the math, and it creates a demand for the Diamond District

for these bigger brands. But, you know, then you also increase, your risk when you're making that type of purchase. Tiffany and Coe is going to get you exactly what you pay for. You want to save $10,000. You might, or you might get some sort of a disappointment or this or that. And there you are. Welcome to reality. Other than say buying from you, because I'm sure you'd recommend yourself as the most reputable and honest jewelry dealer. For your sort of an average person, what would be some things like sort of like buying tips that they should know so that they don't get hoodwinked when they're buying a piece of jewelry somewhere in the diamond

district? Sure. Well, listen, you want to read the reviews, okay? So we're a celebrity shop, but it doesn't matter what I say because the average person does what celebrities do. Okay, they're not sitting here using information to make complicated decisions and things like that. That's what I've realized, okay?

And that's why I have such a hard time, you know, marketing the business to a certain extent because the average person doesn't care about information or value or anything like that. They're all celebrities are buying here. I'm buying here too. I'm a celebrity now. That's the way they're thinking. That's the end of it.

But for the person that is interested in that, you just got to do your research. Read your reviews. Look up the price. Google is an extraordinary tool. You know, you can figure out the distance from here to Mars or anything you could imagine. So if you really want to research the price of something, you just put price of one carrot or price of this and price of that. And do simple math like I did when I was 21 years old.

you know, or whatever it is to figure out how to get the ball rolling. And that's just a general rule for anything. Maxud, you mentioned that the dynamics are different for gold versus diamonds. And the movie Uncut Gems, I don't think I'm giving anything away, but it revolves around this massive black opal that's uncut. Can you explain, like, the differences in how those different markets actually work? Like, what is the difference between how gold finds? versus how an uncut gem or a diamond functions.

Sure. Well, first and foremost, doesn't matter if you're buying a gram of gold or 10 kilograms of gold. It's the same price per gram, all right? So the price doesn't diminish with how much you buy. But with diamonds that greatly affected, right? If you're buying 1,000 carrots of diamonds or 1 carrot, you're paying two completely different prices per carrot.

And that is because liquidating gold, which is going to, you know, the bank will buy it or something like that, you know, governments buy it and has that type of demand where they'll trade it for cash at a moment's notice. Diamonds don't have that. You have to find a consumer to sell your diamonds. And that is a difficult process. Okay, there is a demand for diamonds. Everybody wants diamonds.

No one's going to be object to having diamonds. If I started giving out diamonds in your office, I don't think I'd get two people to say. no, no thank you. But the reality is how much are they willing to pay for them? Okay. So if I'm going through the job of advertising a business and finding the consumers and I'm going to be able to buy a thousand carrots a month or something like that, like right now I buy about 500 carrots a month or something around there, you know, I should definitely get a way better price than the person buying one car because I'm allocating all of these consumers and I'm putting together all these marketing plans and investing all these marketing dollars to be able to move those goods.

So you go to the word uncut and uncut gems. So the way the, let's just put that on pause for a second and I'll give you an insight into how these materials travel. You dig them up from wherever they're at. Then comes the process of cutting them and polishing them. All right. So most of that happens in India. The labor is cheap and the stones get there. They get over there. They get over there. They So half of the game is buying the rough and then having it polished and having the polishers. And there's some big players doing that stuff, okay, whether that's coming for an Israel or Belgium for the bigger, bigger stones and for the smaller stones is going to be happening in India.

So once you've bought the rough for cheap from the miners, whatever it's going on there, I'm not sure because I'm not in that part of the business. And then you get it polished with your big polishing production wherever that's at. now you're bringing it to the Diamond District to go get it to the end consumer and that's where I come in because I'm getting into the end consumer. So if you're going to give me, if I'm going to sit here and liquidate all these materials into cash, I'm going to make sure that I get it for way cheaper than what I sell it for. Otherwise, I'm not going to do it. So that is just the game of it. There's the miners.

they're playing their game, the polisher's, and then the pollishers bring it to the wholesalers and bring it to the retailers. And, you know, that's pretty sure how it moves. At some point, you say you don't, you're not at the spot where you interact with the miners. Could that be on your roadmap at some point as you seek to expand to get bigger and go right to the source? Every single jeweler that's ever found success, if you want to increase your profit margin, and you cannot increase your prices because other people are going to cut into your market share. So you have to lower the cost of your product.

Okay. Now, what's the cheapest way of lowering the cost of your product? Well, you could mine the goods yourself. Now, obviously, you don't have the time to mine the goods yourself. Well, then you have to get somebody else to do it for you, and then the game goes, right? And where are you going to get somebody to do that? Well, you could either just buy it from the miners directly and then get it polished. yourself, which is the bigger players, that's how they do it, and then your margins increase

when you're doing things like that. So the people that were able to, over years, you know, build a dynasty over there and buy some of the buildings on 47th Street between 5th and 6th Avenue were ones that got directly from the miners, got the, you know, the polishers had a, and the cutters had a very close relationship with them, and got the product from the ground level, and we're able to sell it at the retail. That's the only way to really go in that type of industry. They controlled the whole supply chain. You have to.

So you mentioned, well, when we were talking about diamonds, you said everyone loves diamonds and if you were handing them out for free, no one would say no. But one thing that we hear a lot nowadays is that millennials or younger people actually aren't buying diamonds as much as they used to, maybe because they're out of fashion in some ways or maybe because there's concern about where the diamonds come from, like whether or not their blood diamonds. And maybe also there's concern about artificial diamonds, sort of contaminating the supply. Do people still want diamonds? And do any of those trends like lab-grown diamonds actually impact your business? Yeah, everything impacted from everything you mentioned.

Well, you know, certain millennials are off put by diamonds nowadays because they have a whole different mentality. And number one, they really don't have the money to buy any diamonds, all right? That's just a reality as well. They don't have any of that extra income that they're going to sit here and start getting diamonds for their girlfriend on Valentine's Day and things like that. They're lucky if they could take them out to a normal restaurant. And on the other hand, well, that's on one half of it. The other half, the demand is increasing for more of a hip-hop. style jewelry as hip-hop is expanding around the world.

And it's really a force that people are underestimating because it's capturing the youth in ways that it's never been captured before more and more, right? So whether you're in Europe or now in Asia and you're 15 and 16 and you're listening to these rappers, a little pump or Takashi or what have you. And they're spending $250,000 on a piece of, jewelry. They're not sitting there and listening to, they're not finishing their social studies homework and things like that. All right. Now, for you guys over here, you're not in that mentality, but they're young and they're impressionable. And they're not being influenced,

you know, by fiscal policy. You know, they're being influenced by someone who took $250,000 and bought a necklace. And they want to participate in that. And they participate it. So that that market share is probably going to grow. And the one that's going to decrease, is probably going to be these millennials that they might just switch to what they're buying. They might buy a little sapphire in a silver ring or something like that or something on the cheaper end. There's still a profit margin there, so to speak. The market is going to shift around that.

And then when it comes to lab made and grown diamonds, well, you know, diamonds have a destiny. The reality of diamonds is there are carbon crystal. And that carbon crystal would be, has a... amazing acoustic properties, okay, and it also has, you know, it would be great for a window on a spaceship or something like that, or you could put it out, if you could make an engine out of diamonds instead of out of steel, it'd probably last to, you know, a couple of million miles or maybe indefinitely. So it has a destiny that's not just for, you know, aesthetic appeal or something like that. So it's going to end up there. I don't know how long it's going to be, but I think that diamonds

are going to be manufactured more and more, and then once it has some industrial purpose, I don't know what's going to happen, but it's going to be interesting. Well, this gets to something that I really wanted to ask you. I think it's sort of one of the big things that's been on my mind since watching the movie, which is just sort of the obsession with diamonds and gems. And the movie opens up with one of the miners in Africa getting injured. We see the extreme lengths that the people and the Diamond District go to get their hands-on gems. We see the impact that the gem in the movie had Kevin Garnett, the basketball player, inspiring him in the movie to win the NBA finals and so forth.

Just in your view, sort of like from a big picture standpoint, what is it about diamonds? What is it about gems? What is it even about gold that just sort of like hits people at this fundamental level that they just go crazy to dig up rocks from the earth? Well, that's a good question. Gold is called the most beautiful element. Okay, so there's, I don't remember how many elements there are, I think, like 100 or something like that, around there.

And out of all of them, the most beautiful is gold. Okay, it has incredible reflective properties. It reflects light. It looks like sunshine. When regular light hits it, reflects it. It's quite beautiful. That's all it needs, right? To some people in this world, beauty is all they need to get by, and that's what these gems have.

And they attract attention, right? If there was a bar of gold in a room and somebody walked in it, their eyes are immediately on it. And if you have that substance, those eyes are going to kind of transfer on you. You kind of share those properties, all right, on a subconscious level with them. You have it. Why doesn't everybody have gold, right? I just did a calculation the other day. if we were going to distribute all the gold that's ever been mined evenly,

everybody would get around 11 grams per person, okay, of gold, right? If we were all equal, but we're not all equal, some people have massive amounts, some people have nothing at all. And who has the massive amounts, who's who, and what's what, all that just plays into that. And that just is an advertisement for people that they have this beautiful stuff. And the other hand, it is beautiful, because I have a couple of sapphires I own, right,

that I'm saving or I'm using for something interesting. And when you look into some of these sapphires, maybe it's in my head, but it's such a deep, beautiful blue, right? And some of the ones I have are very rare as opposed to some of the really dark ones that don't have that luster, and you find that perfect pitch of color and cut and clarity,

and it becomes something so rare that you really just enjoy, just looking at it. You know, I don't know. Is that your favorite gem, sapphires? I love sapphires. It's my birthstone. So, you know, when I... That's September, right? Yeah, September. Maybe I need to get a sapphire. So just, you know, when I first saw the sapphire and I was told it was my birthstone, again, just a psychological impact of that. When I was young, you know, I was just intrigued, but, okay, it's my birthstone. Can I have one? No, you don't have any money, right? Here's this little one, or here's just this tiny one, but where's the bigger ones, mom or this one, that one?

And you have that feeling that this is something you want but can't have. Why not? Well, there's not enough of them for everybody. You have to be special to have one. And it's just a part of the human experience that's not really going anywhere. Tracy, if I get you a gentleman-crusted Furby, will you get me a Sapphire for my birthday? That sounds like a really good trade, actually, because I'm pretty sure the Furby is going to cost like $20,000. So yes, yes, you can have a small, dark sapphire in exchange. I'm getting a lot of business

here. I'm hoping you guys are going to be buying it from me and no one else. How's your, I'm curious how your life has it changed in any way since the movie came out? Yeah, definitely it's definitely a benefit, right? The way I equated is if I was trying to put myself in a movie for a commercial, I think it would cost me over a million dollars to do something like that. right if i was if i had it came out with a new car line or a car and i want to put it in a new james bond movie right it would you know and i had uh you know bmw and i wanted to put it in there i think it would be a quite an expensive endeavor so for me to be a jeweler in the diamond district and get a part in a in a diamond district movie one of the very few that there's

been um is a blessing essentially so it definitely has benefited me and it just to hit international Netflix. So people are messaging me all the time. And then when it hits regular Netflix, people are going to watch it. It might be a cult classic. So I might be. I think it will be. Yeah, I think it's going to be a million-dollar commercial for free.

Has everyone in the Diamond District watch it and have opinions on it? Of course, yeah. And they all like it. It's pretty good. Well, uh, Maksud Agajani. Thank you so much. That was fantastic. Thank you.

I've been looking forward to this conversation a long time and I appreciate you coming on. I have one last very small question. Any question? If I don't get diamond-en-crested Furby, like, let's say I don't want to spend quite that much. What's just sort of like a nice, like, basic thing to get someone? Well, you know, that's a good question. Some gold jewelry is cool and something with gems in it, something with diamonds. But it's something personalized, I think, would be the, would be the,

what has the best effect on people. When I make a custom-engagement ring or a custom pair earrings with berthstone surrounded by diamonds or something custom-made. with your involvement and the jewelers involvement, and it has a special output for the person that receives it. All right. I'll be by the shop soon. All right.

Sounds good, thanks. I appreciate you. Joe, just in case you were wondering, in addition to a diamond encrusted Furby, I would also take a gold-plated outline of the VIX curve. You can have that made.

Ooh. Okay. I have to think about what I want customized from you, but I'll definitely, I'll get you one of those two things, for sure. Excellent. Excellent. So I think I am a legit, I'm a gold bug now. I'm totally sold. And I totally get it. You know what I really liked? In fact, among other things, I thought Maksud's point about

how little gold everyone would get if we had to distribute it evenly. Because on some level, okay, yes, life isn't fair. But it is the ultimate sort of emblem of like, yeah, there is, there are aspects of the world that are a zero-some game, and if you have more gold, then that means someone else has less of it, and just sort of like that sort of drive, like something about that really resonates to me as I can see why people not only want to acquire it, but show off that they have it. I think you're becoming an economic nationalist. But there's one thing that we didn't discuss, which is, okay, so obviously gold is a status

symbol, it signifies power and it signifies wealth. but in the movie, in uncut gems, gold and all this jewelry and the black oval that we spoke about actually becomes a problem for the guy, right? It's a source of instability in his life and insecurity. And I wonder, you know, if you do put all your money into gold, then obviously you have a storage issue. You're going to have to put it someplace safe. You might worry about wearing all your jewelry out on the street.

I don't know. but it seems like it can be a source of insecurity as well as a display of power. Yeah, I thought about that too, like a source of insecurity or sorts of stress, like just having to put everything in a safe every night thinking about ensuring that or you go buy these jewelers when you walk across them at night. And of course, they've emptied out their shop windows so there's nothing even visible. Like that whole process of having to protect, protect it and, you know, to some extent, protect yourself, it definitely seems like, yes, it's a source of power. It also seems like it

be a major source of anxiety. That said, I still want the diamond Furby. I would still take it. Okay. I would guard it. I would wear it every day and take such good care of it. All right. I'll see what I could do. I'll see if I could expense it. All right. This has been another episode of the Oddlots podcast. I'm Tracy Allowway. You can follow me on Twitter at Tracy Allaway. And I'm Jill Wisenthall. You can follow me on Twitter at the stalwart. And you should definitely follow our guests on Instagram. It's really amazing to watch.

He's Tracks NYC. The name is Maxud Agajani. Awesome Instagram account. I swear, he's turned me into a gold bug, and I'm going to go to his shop soon. And you can see him talk about all these things and show the manufacturing process. It's very cool. Also, you should follow our producer on Twitter. She's Laura Carlson. She's at Laura M. Carlson. You should follow the Bloomberg head of podcast, Francesca Levy, at Francesca today.

And check out all of our podcasts under the handle at podcasts. Thanks for listening. June Grasso, inviting you to join me for the Bloomberg Law podcast. Every weekday, we help you make sense of the legal stories that shape the nation and the world. Listen for complete analysis of the biggest court cases, the latest actions from Congress and regulators, and the legal. moves driving the markets. From corporate law to constitutional law and from state courts to the Supreme Court. At Bloomberg Law, we go beyond the day's headlines. We speak with top attorneys, judges, scholars, and policy experts to break down what the rulings really mean. We do this every weekday, then bring you the best conversations in our daily podcast. Search for Bloomberg Law on YouTube, Apple, Spotify, or anywhere else you listen.

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