This small gemstone protects the bearer from thieves by attempting to become an irrisistable target for theft, rather than real loot, and then magically reappearing back in the hands of its owner shortly after the thief has moved on.
In your travels you will come across some sneaky little blighter who will try to steal your ill-gotten gains, the Dazzling Lootstone of Misdirection is the gem to help prevent loot from being yanked from your pack.
It is not guaranteed to work; instead after being "caught" by the trap, a second roll is made. For this second roll, you have a 10% chance to avoid losing an item to a trap. Note that the Lootstone has no effect upon traps that do not affect your items.