Investing/speculating in Myanmar gemstones at source

This topic contains 14 replies, has 5 voices, and was last updated by Algo Girl Algo Girl 8 months ago.

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  • #1
    simon43
    simon43
    • Posts: 4

    As detailed on another forum, I recently left Thailand, (where I have had a home since 2002), and returned to work in Myanmar (Burma) – I previously worked in Myanmar in 2012 and 2013, and enjoyed my time in the country.

    So now I find myself with an enjoyable job in the city of Naypyidaw, and nothing to spend my salary on!

    Myanmar can be an extremely cheap country to live in, and I find myself saving about 90% of my salary each month.  What can I do with some of those savings?

    The answer is not that easy, because there is no viable outbound funds transfer system offered by the Myanmar banks.  I have to hand-carry thousands of USD every 90 days to my Thai bank account when I do a visa-run.

    So I started to think about investing (some would say ‘speculating’) in Myanmar gemstones, since I am literally sitting on the source of many of these gems.

    Many amateurs have lost money on the purchase of gemstones, and I do not want to follow in their footsteps.

    I am not looking to make a quick profit.  Rather, my research suggests that if I buy high quality gems, (paying a fair market price for these), then the increase in value of these gems over say, a 10 year period, should greatly outweigh the rate of inflation and miserable interest rates that banks offer.

    It seems from historical price data, that the value of high quality gems always increases at a good rate, unless there is some technical development which allows synthetic or fake gems to be created which cannot easily be identified as fakes by expert gem dealers.

    So what suggestions do you have to avid me setting fire to my fingers?  I propose to invest a modest sum (my salary is also modest!), of perhaps $500 – $1,000 each month in the purchase of quality gems.

    The forum’s advice is appreciated.

    #2
    Bulldozer Dawn
    Bulldozer Dawn
    • Posts: 22

    Simon

    Thanks for migrating your discussion over to this forum.  I am trying to move away entirely from  that “other” website.  Since it changed hands it has become unworkable.  I find that the information here at Thai Shares is much more useful and more compatible to my personal interests, goals, and objectives.

    Here are some initial things (Tips if you like) that you should think about carefully from the outset.  I am happy to participate in this thread with you as gemstones are a topic that I love.  As I posted on the other forum, I have made a good deal of money by collecting stones.  The irony is that when I first started, I knew nothing of investment.  I just started collecting gems because I loved to look at them.

    Ok…now for some initial points to get our discussion started.

    1.  Did you know that gemstone trade is one of the prohibited occupations under Thai labor laws.  I am fully aware of your background in Thailand…but I mention this fact because if you are carrying stones over to Krungthep for valuation the aforementioned law would give a Thai customs officer reason to seize (and of course keep) your stones.
    2. If you track stones to their source (the mine) you should not focus upon buying cut stones.  Why, because if a stone is already cut chances are it didn’t come directly from the mine (but rather came from a faceting operation some place else).  Buying a cut stone increases the risk of a fake.  But it also means that you can not seek to value add to your investment.  Going to the source (the family mine) and seeking buy “roughs” (uncut stones) is a much better way to go.
    3. If you buy roughs, and if you have sufficient time on your hands, you can then learn to facet the stones yourself.  I note your background in communications (and ham radio) and you probably would enjoy the gadgets and the attention to detail that is required to cut stones.  Not only would you be significantly value adding to your investment (the rough stones that you bought) but you would also be adding to your investment in yourself.  Faceting is a job that you can do well into your 70s, not many other occupations like that.  It is also a great hobby.
    4. Alternatively, if you do not want to learn to cut stones yourself, you can still buy roughs and then shop around for the best price for cutting them.  A lot of stones used to get sent to India for cutting, but I imagine that there are now a lot of cutters popping up around Mynamar.
    5. The value of alternative investments (think old paintings for example)  is always increased where provenance can be shown.  If you buy roughs you can photograph or video the mine, the sale to you of the stone, the cutting…etc.  This is very important if you want to focus on a few high value stones rather than bulk.  Your provenance bread crumb trail can then be used as one of the primary market tools when you seek to on sell your stones.
    6. My suggestion that you buy Amber was not in jest.  Myanmar is the best place to source it and if you read up a little you can actual shape the roughs yourself using nothing more than a rasp and some wet and dry sand paper.  The cabochons “cabs” are then easily sold to the cashed up, middle-aged, Eat Pray Love crowd.  The clown pants crowd will also buy them.  Amber is one of the cheaper stones to get started with so you can use it as a training ground without too much risk to your capital.

    Alright my fingers are already tired from typing.  Hopefully I have given you enough to start to chew on (or enough rope to hang yourself… 🙂 ).

    Please feel free to ask me anything you want and I will do my best to give you a good answer.

    If you know anyone else you think would make worthwhile contributions to this thread, or to the forums here at Thai Shares, please send them a link so that they can also join up.

    #3
    Bulldozer Dawn
    Bulldozer Dawn
    • Posts: 22

    Simon

    If you are in a posting mood, I would also encourage you to start a new topic in this forum here called “Building Small Resorts as a Retirement Investment”….or something like that.   I would like to discuss in detail the lessons learned from your projects in Phuket, and I am also very interested to note you have already started researching Laos.  Would love to pick your brain on that later topic.

    #4
    simon43
    simon43
    • Posts: 4

    B D, thanks very much for your good advice!

    One reason for considering getting into the gems business was because there is not a lot to do in Naypyidaw, apart from counting the traffic jams, (which takes about 0.1 seconds).

    There are naughty nightlife (secret) venues, but I have to be a little careful because I’m a primary school teacher, and I don’t want to be caught with ‘my pants down’, so to speak (the school boss would not appreciate this).

    So I have time and some modest money on my hands.

    I wasn’t yet aware that trading in gemstones was on the prohibited list in Thailand.  So is real-estate dealing, but may foreigners do this.  I guess the idea is to enter the country with my gems suitably fashioned into a temporary personal necklace.

    The idea of buying roughs and faceting them myself is intriging.  I had always assumed that to cut a rough requires decades of experience and highly expensive equipment. I’m sure that to cut a rough ‘well’ does take a lot of experience. But I also recognise that buying roughs, faceting them and then selling them would be the best way to maximise the profit.

    Now that Myanmar is off the sanctions list, accessing both Ebay and Paypal is possible. So it would be relatively simple to sell direct from Myanmar on Ebay. (Paypal cannot link to a Myanmar bank account, but I already have Paypal accounts linked to my Thai bank accounts).

    I need to look further into this process….

    As to creating a provenance, you’re reading me like a book!  My plan was to locate and establish a good relationship with some smaller, family mines, then record and photo the whole process from buying the rough or gems, through cutting/polishing etc and then the final item.

    Since Amber seems much easier to cut/polish etc, perhaps this is where I need to investigate first.

    It would certainly benefit me to re-learn Myanmar-sa (Burmese).  I did learn conversational Myanmar-sa in 2012, as well as reading and writing the language to a basic level.  (I needed this language skill to teach the youngest of students).

    That knowledge is still located in one of my brain compartments, but I seem to have misplaced the key…  🙂

    I think I need some one-to-one Myanmar-sa lessons from some of the pretty young local teachers at my school in Naypyidaw.

    Please tell me more about Amber – I’m interested. (I recall the recent news about the Chinese amber dealer who found the tail of a miniature dinosaur encase in amber at a market in northern Myanmar).

     

     

    #5
    Bulldozer Dawn
    Bulldozer Dawn
    • Posts: 22

    Transporting your stones is a topic perhaps worthy of its own thread.  I tinkered with the idea of opening a gemstone museum here in Thailand (displaying the stones I already have that are sitting back home) but I am loathe to have them confiscated by customs.  While researching this idea, I bumped into the info about the gem trade being a prohibited occupation for farangs.

    One techinique that I have used to transport some smaller quantities of stones (gifts for Thai girls… 🙄 ) is to use one of those amulet tubes that the Thais wear.  As you have already observed in your previous post, it is not (yet) illegal to wear jewellery when travelling:

    Get on of the bigger tubes that you can fill with lots of stones.  Once it is filled you glue the ends on with superglue.  If you get stopped by customs you just tell them the truth.  You are wearing your amulet. 🙂  And they can’t open it without hack sawing the ends off.

    Of course the tube does not have to be clear.

    Many years ago, in Tibet (yes I also have a collection of Turquoise 😀 ) I purchased an small box hand made out of hammered sheets of gold.  It is a beautiful rustic thing, with the box about twice the size as two match boxes laid side by side.  It has an eyelet at either end also so that you can wear it around your neck as an amulet.  One end slides off so it can be filled up inside.  It has come in handy a few times.

    About 8 years ago I was up on Koh Phayam (back when it was still paradise).  I bumped into an old (French I think?) guy who was staying near me in a cheap bungalow on the beach.  He had spent years in Myanmar and his business was to buy rough amber (with insects and other curios inside) and then hand shape it into cabs.  He had a big black velvet roll cloth, on which he displayed his finished pieces, laid on table in front of his bungalow.  He sat there working on new cabs (filing and sanding) and the younger clown pants crew, and some older cashed up Euro hippies, were buying the cabs hand over fist.  In fact, one middle aged German woman bought about 90% of all of his finished cabs in one go (she had plans to on sell them back home).

    That evening, after meeting this guy, I thought to myself, what a great little business he has.  The products were selling themselves, no marketing required whatsoever, other than opening his velvet roll cloth, and his tools of trade consisted of a rasp and some wet and dry.  All cash, no tax, his shop stock was not perishable (in fact it increases in value with age) and he can move about to sell where ever he wants.

    Please feel free to share more information about your teaching work in Myanmar also as this thread develops.  I too have one foot out the door here in Thailand.  I taught in academia for more than twenty years and so the prospect of doing a little teaching in Burma is of interest to me as a way to keep my mind active.

    I have had a great many invitations to teach here in Thailand but I only want to do it part time as a hobby to keep my mind sharp, however as you know with the visa situation here that is currently impossible.

    #6
    Thai Shares
    Thai Shares
    Admin
    • Posts: 10

    Simon

    Welcome to Thai Shares.

    I took the small liberty of uploading an avatar for you.

    If you wish to delete, or change, your avatar the instructions are located here:

    How to Create and Upload Your Avatar

    Have a happy and safe New Year.

    #7
    Algo Girl
    Algo Girl
    • Posts: 18

    Hey. What a great idea for a thread.  I’m always interested in learning about alternative investments.  I work in finance and although my job is pretty cool, my workplace is as boring as hell.  I would exchange my cubical for the jungles of Burma in a heartbeat.

    Simon43, if you could share some pictures of the gems that would be great.  I might even buy some if you offer me a bargain 😉

    #8
    Bulldozer Dawn
    Bulldozer Dawn
    • Posts: 22

    Simon

    I guess you just have time for dreaming about your Gem Stone Empire on the weekends?

    #9
    Bulldozer Dawn
    Bulldozer Dawn
    • Posts: 22

    Simon.  Any updates on your gemstone empire?

    #10
    simon43
    simon43
    • Posts: 4

    Hi, well I’m still here.  I started a new job in Naypyidaw just a few weeks ago, so I”ve been rather busy settling in to the job, finding my feet etc.

    One item that I need to sort out is a motorbike, so that I can get out of town to visit different locations, even just going to the shops, since Naypyidaw is widely spread out and walking anywhere is all but impossible.

    At the end of March I have several weeks holiday, and so I’ll try to plan to visit some interesting areas during that time, and post my experiences on this forum.

    #11
    Hoonzilla
    Hoonzilla
    • Posts: 99

    Hey Simon

    Thanks for keeping us updated on your adventures.  I too, am very interested in hearing your “on the ground” reports.

    Good luck in your new job.

    #12
    Bulldozer Dawn
    Bulldozer Dawn
    • Posts: 22

    Hey Simon

    Glad to hear from you.  Before you head out into the boonies (if it is safe to assume Naypyidaw is not already the boonies?) you should make sure you have the following three items in your kit bag:

    1. A jeweler’s loupe
    2. Digital scales
    3. Density pen

    Even if you don’t know how to use them yet, anyone selling stones should take you very seriously when you pull those items out of your bag. 🙂

    Best of luck with your new job.

    #13
    Thai Shares
    Thai Shares
    Admin
    • Posts: 10

    It would be great to see some photos from your adventures.

    The instructions on how you can post them to this forum are located in our FAQs here:

    Thai Shares FAQs

    #14
    Bulldozer Dawn
    Bulldozer Dawn
    • Posts: 22

    Simon

    Any updates.

    #15
    Algo Girl
    Algo Girl
    • Posts: 18

    Hey Simon.  Any news.

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