LETTERS TO THE EDITOR — Diamond investor urges patience

I am an individual investor who would like to help restore the confidence of diamond stock investors.

Investors should be asking the following questions: Is the current price decline of Canadian diamond exploration stocks indicative of yet more unpleasantness, or will diamond stocks rebound? And if they do, when? Investing in diamond stocks is not an exact science. The process of selecting such stocks is inexact — perhaps part intuition and part luck. The individual investor can anticipate the continued delay of drilling results. If the growth of grey hair is to be minimized, the key word is patience.

A large consolidation or merger will unfold. The critical element will be financing. Balance sheets are not tuned to the high costs of diamond exploration, nor are they structured to endure long processing delays. Expect the diamond market to make another astronomical move by the spring of 1994. There will be many stocks not worth joining for a roller-coaster ride. It is important to remember that the Canadian diamond industry is still in its infancy.

Cliff Houy

Austin, Tex.