How Coke Helped Create Pepsi, and Other Historic Market Moments – Motley Fool

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How Coke Helped Create Pepsi, and Other Historic Market Moments
Motley Fool
The stories of Coca-Cola (NYSE: KO ) and PepsiCo (NYSE: PEP ) have a lot more in common than brown, fizzy sugar water.

Steven Mallach‘s insight:

The history of the ongoing battle between Coke and Pepsi for market share is as fascinating as it is instructive.


The competition between these two giants will only become more interesting as new US regulation governing the use of ‘natural’ ingredients in their softdrink alternatives heats up.


Given that the market is changing, and has been for some time the pressure on their marketing operations is going to be significant.


My predication – look for the bottled water market to become more cut throat as differentiation between ‘natural’ and reverse osmosis brands becomes a factor in market dominance. Also keep an eye on the growing consumer awareness of recycling and ‘plastic container’ issues.



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New Longform Article – The Brazilian Property Market

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Mention a trip Brazil in any conversation and the ensuing discussion will inevitably revolve around Carnival, that no holds barred festival of light, color and excitement that has become synonymous with the Brazilian ethos. However, recent events that have seen Brazilians flood the streets of Rio in protest against the spiraling cost of living, providing tourists with a spectacle far removed from the colorful floats and hedonistic scenes of Rio’s signature tourist event.


The current wave of streets protests were sparked by the latest round of bus fare increases and one can sympathize with the residents of São Paulo and Rio de Janeiro when it comes to this essential service. These urbanites spend a much larger share of their salaries to ride the bus than residents of New York, Paris or London

The outcry has since spiraled into a confrontation over what many Brazilians feel is government ineptitude that has led to prices that have transformed even the most basic of goods into luxury items beyond the reach of the average Brazilian wage earner.

A recent New York Times article gives some insight into the financial challenges faced by the average Brazilian, including the costs associated with property rentals. According to the NYT renting an apartment in coveted areas of Rio has become more expensive than in Oslo, the capital of oil-rich Norway.

Other examples abound, such as a large cheese pizza at around $30 and sky-high tech costs. For example a Samsung Galaxy S4 phone available in the United States for around $615 is nearly double that in Brazil, a worrying state of affairs for a city that is seen by many as the powerhouse of Brazilian economic and business competitiveness.


So how will these latest protests affect the property market? Does the high cost of rental mean that property investors are looking at superior returns, or is the bubble about to burst? Let’s look at the current state of the economic drivers which are affecting  the property market in Brazil and get some insight into just why this country, which is now the seventh largest global economy in terms of GDP remains the land of opportunity for those in search of superior returns.


Only two years ago Brazil, as the largest economy in Latin America was widely touted as the land of opportunity for property investors, in part due to a housing market boom caused a long run of declining interest rates. From a high of 26% in 2003 The Central Bank, Banco Central do Brasil’s Selic rate has fallen to 7.25% in 2012. Mortgage rates have fallen in lockstep with this interest rate decline, standing at 10% to 12% during the first half of 2013.

This decline has caused a focus on property from both foreign and domestic buyers, however today there may be dark clouds on the horizon for those hoping to cash in through rentals based on the low barriers to entry into the market based on competitive mortgage rates. The central bank has re-examined its monetary policy during 2013 and raised the benchmark interest rate during two consecutive meetings to 8% in May 2013 in order to rein in inflationary pressures.

It is worth noting the various pressures that are causing the inflationary pressures that Brazil is facing as we reach the last quarter of 2013. The country has been faced with an infrastructure backlog that has simply not kept up with the robust growth of the country. This places enormous strain on both ports and harbors and means that farmers and other manufacturers and producers pay up to four times as much to get their goods to ports. The cost of doing business in Brazil is simply astronomical.


It remains to be seen if the recent increases in the benchmark interest rate and diverse macroeconomic challenges will dampen the enthusiasm of investors who seem to still have great faith in the potential of the Brazilian market.

There is however cause for optimism. The Brazilian President, Dilma Rousseff has taken bold steps to revive the economy by weakening the currency, providing tax breaks and putting in place measures that are aimed at not only controlling interest rates, but lowering them in the medium to long term. The President has also been extremely focused on the housing market, making federal subsidies and state bank loans available to developers and nearly doubling spending aimed at eliminating the backlog of affordable homes in the country. The plan to develop around 2 million of these entry level homes is on track and will be completed during 2014.

It’s not all good news as far as the steps that are being taken to stabilize the economy. Many pundits have pointed out that the government’s initiatives lack direction and that the absence of a structured plan to address the deep structural problems of the Brazilian economy, combined with a lackluster monetary policy will negatively affect the housing market for the remainder of 2013 and into the first quarter of 2014.

The latest findings on the Brazilian economy, based on a report by Standard & Poor’s paint a gloomy picture. The ratings agency estimates that growth over the next three years will average 2.6% per year, which is marginally below the average growth rate of 3.2% in the 13 years between 1999 and 2012.

Despite corrections to the historically high interest rate consumer borrowing still remains unacceptably high. The reasons behind this continued reliance on credit may be complex, but one conclusion is inescapable, the availability of cheap credit is fuelling consumer credit buying behavior due to the still sky high prices of domestic goods.

Although on the face of it these figures may paint a gloomy picture, there is a contrarian viewpoint. Although Brazilians may be spending on credit this may in fact motivate many to consider rental options, rather than outright property purchase (although this activity remains robust as will be explained later). This may be good news for foreign property investors. This viewpoint is reinforced by comments in the S&P report, in particular the following:

“The successful transition of about 35 million people to the middle class–probably the greatest success of the past decade in Brazil–is reshaping Brazil’s political economy framework”.


A rising middle class is a factor that will influence foreign investors in their decision as to whether or not Brazil’s major cities present an attractive option for sustainable investment.

These projections also need to be balanced by the fact that foreign investors remain extremely optimistic about the property market. The reasons for this upbeat attitude are varied, but include the fact that (current questions notwithstanding) Rio de Janeiro will host the final match of the World Cup Soccer tournament  in 2014 and the Olympics in 2016. For those doomsayers who question the ability of Brazil to host a problem free World Cup tournament it is worth noting the sport’s governing body, FIFA has never cancelled or relocated a World Cup tournament at the 11th hour. It would be a logistical and financial nightmare to do so at this late juncture and some experts even maintain that it would sound the death knell for FIFA.


This aside from the almost inevitable wave of civil unrest across South America that would be the inevitable result of the cancellation of the Brazilian led tournament.


The taxation issue is one that has affected the buying power of Brazilian consumers and thus negatively affected the average consumer’s ability to engage in relatively expensive rental options. However, this too is changing and both Brazilian businesses and the consumer can look forward to a decreased tax burden in the future. This is long overdue as the wider tax issue has contributed significantly to Brazilian taxpayer / consumer dissatisfaction and the resultant street protests that have bedeviled the country in recent months. At the heart of these protests is the particularly Brazilian attitude towards sales tax. Sales tax in its purest form does not distort the market and is particularly effective at raising revenue.

In Brazil sales tax is simply a dysfunctional revenue raising tool. Many consumers are travelling on junkets to Miami in order to buy goods that have been priced beyond their reach due to inefficiencies in the supply chain. Sneaking these goods into the country has become a way of life and as mentioned in a recent New York Times article sneaking smartphones into a country in your underwear is a sign that something is deeply flawed in the system of taxation.

It’s worth noting that the tax issue has contributed significantly to the recent unrest which saw Brazilian consumers take to the streets in unprecedented numbers. The Brazilian government has taken note of these inefficiencies and is taking steps to correct the imbalances that are present in the economy, a trend that bodes well for both the stability of the country and the attractiveness of Brazil as a property investment destination.


Until recently the Brazilian consumer paid an average of around 40% on their debt, a clearly unsustainable financial burden for the vast majority of the country’s approximately 199 million inhabitants. Credit card rates were in triple digit territory for some consumers, placing even more financial burden and adding significantly to the cost of borrowing.

The fact that interest rates are now coming down across the board, allowing for more sustainable consumer spending and the reallocation of capital away from government bonds into more productive investments is a very welcome development for those interested in property investment in Brazil.

An examination of the population demographics of Brazil will also cheer property investors who are interested in mid level property investment, The median age of the Brazilian population is 29.6 years, compared to 37.1 in the United States and 43.8 in Italy. Brazil therefore does not have the additional financial pressures that stem from caring for an aging population and this demographic representing a growing middle class is the ideal target for rental in a market that is both optimistic and increasingly stable due to strong macroeconomic management.

A few words of caution are called when evaluating the Brazilian property market. The downward pressure on interest rates makes mortgage financing extremely cheap for Brazilians and this combined with rising incomes has motivated a spate of property purchases amongst a growing Brazilian middle class. However, there is some hesitation from foreign investors due to concerns that the increasing amounts of cash in the economy could cause inflation to spiral out of control.


As previously mentioned the Brazilian property market has been attracting a lot of attention from overseas buyers in the last three years due to extremely robust growth. According Knight Frank’s Global Real Estate Index, released at the end of 2012 Brazil comes in at number one in terms of rising home prices. Outliers like Dubai and Hong Kong saw greater increases in prices, however neither of these is a country, and moreover both are subject to economic, social and market forces that should caution against using these data from these two examples as a basis for direct comparison with Brazil. The fact is that no other country has seen prices rise as much as they have in the past few years as Brazil.

Still growth potential - Sao Paulo.

Still growth potential – Sao Paulo.

Housing prices in Brazil rose 13.7% from the fourth quarter of 2011 to year end 2012. In comparison US housing prices rose by 7.3% in the same period. The lower cost of borrowing has certainly led to an increase in investment in various types of property in Brazil. Mortgage rates are around 1.3% per month and the typical loan repayment period is 15 years.

There is no doubt that Brazilian buyers are developing an appetite for property based on this lower cost of financing. In the past Brazilians preferred to buy property for cash, today down payments and finance are the preferred methods of entering the market. The result of this trend has been a five-fold increase in mortgage lending between 2009 and the end of 2012. The question of whether this trend will continue is one that will directly influence investors in search of above average rental returns.

The appetite for property among Brazilians residing in the major cities of Sao Paulo and Rio de Janeiro (and Brazil’s other major urban areas) is driving prices upwards. By the end of 2012 prices in all of Brazil’s major cities has outstripped the inflation rate of 5%, some by a wide margin.

Samba Central - is the party still on for property investors?

Samba Central – is the party still on for property investors?

Even with this steadily increasing price curve the costs of buy in to property in Brazil’s major urban areas is still tremendously attractive. At the opening of the new Fiat factory located in the state of Pernambuco, Brazil’s President Luiz Inacio Lula da Silva said that Brazil would be the fifth largest economy before the Olympic Games that will be held in Rio de Janeiro in 2016. This development bodes well for those who wish to dip their toes into the Brazilian property market in search of medium to long term returns.

Property investors would do well to take note of the changing trends affecting the buying behaviour of Brazilian consumers. The ready access to cheap credit in recent years had caused many Brazilians to re-evaluate their attitude towards owning a home, with many deciding that ownership was preferential to rental. However, recent street level protests in the major cities, caused by an increasingly militant attitude to cost of living increases may be an indication that the finances of the average Brazilian consumer have been stretched to breaking point. This in turn may cause many to return to rental as a viable option.

Those investors attracted by the idea of obtaining a rental income from Brazilian investment should take note that the lowering of interest rates is not only fueling outright buying behavior. As Brazilians use their available credit to purchase extremely expensive fast moving consumer goods they come under further pressure as regards access to credit for the outright purchase of apartments and landed property. This in turn makes both short and medium term rental an attractive option for Brazilian consumers, especially given the uncertainty caused by the fluid nature of the current interest rate and inflationary environment.

One of the considerations when evaluating the Brazilian urban property market as an investment option would undoubtedly be a comparison based on the opportunity cost of investment in the country as compared with other markets.

The average cost per square meter in Sao Paulo is around the $3,500 (US) mark, while in Rio (the most expensive city in Brazil) that cost is significantly more with a square meter cost of around $4,000 (US). This may seem expensive when compared to the situation only 5 years ago, however a direct comparison with other metropolitan prices may provides some context. For instance given that 1 square meter is around 10 square feet the median price in Brazil of $4,000 per square meter is equal to a bargain basement $400 per square foot. Compare this to New York where the average price is around $1,300 per square foot.


Here’s an indication of the strange ‘through the looking glass’ state of property investment in Brazil. The only Brazilian home-builder traded on the New York Stock Exchange, Gafisa (GFA) struggles to stay above $4 a share and the stock has been in a downward spiral for the last five years, losing 77% of its value during this period.

This is during a growth phase when Brazilian housing prices were rising to the levels where they are today – the fastest increase in a single country in the world. This situation may give investors pause, however it may be attributed to the inefficiencies in the Brazilian supply chain, and not a reflection of the investment potential of finished homes in the country.


For many investors landed homes may not be the target of their interest in the Brazilian property market. Many investors have their sights set on the rapidly growing purchase for rental apartment segment which is showing robust growth in Brazil’s major metropolitan areas.

An interesting exercise for foreign property investors is an evaluation of property investment opportunities for an outlay of around R$300,000 (approximately US$130,500). For this sort of price, which may represent the current sweet spot for foreign investors looking to balance initial investment with rental income, both Sao Paulo and Rio de Janeiro have some attractive options.

In Sao Paulo this sweet spot is in the region of R$350,000 (approximately US$152,000). At this price point the most attractive options would appear to be two bedroom apartments in some of the less sought after suburbs of the city, such as Villa Sonia (Western Zone), Villa Nova Sabara (South Zone) and Villa Guilherme (North Zone). For around R$300,000 (US$130,500) investors can take ownership of one bedroom apartments in some of the more affluent and established suburbs of the city.

Sao Paulo by night.

Sao Paulo by night.

For R$300,000 Rio offers value for two or even three bedroom properties in the less central Southern areas of the city, which may require that occupants make use of Rio’s now notorious public transportation system in order to access their places of work. These ‘value for money’ neighbourhoods include Iraja in the North or Recreio and Jacarepaguá in the West Zone. For this sort of price, value for money means sacrificing square meters as one gets closer to the city centre.

New hotels and the increasing numbers of Pacification Police Units (UPP) in the poorer areas of the city have resulted in property prices increasing steadily. For example the installation of the UPP in the suburb of Tijuca doubled the value per square meter in the Northern region. This is a trend that is set to continue in the run up to the Rio Olympics in 2016. Savvy investors will have already priced in the trend and for this reasons bargains may be difficult to find.

In these areas it would be unusual to pick up a small studio (more on that below) for around R$300,000, although there are still bargains to be had for the patient and astute investor.

A word of caution is perhaps warranted when it comes to pricing that relies overmuch on the psychological effect of hosting the Olympics, as well as the Soccer World Cup. In almost every country, especially those in developing regions that bubble of optimism and accompanying high property prices that surround these events has failed to deliver sustained medium and long term value. Given that Rio, in common with other cities in Brazil has some very real infrastructural challenges to overcome, care should be taken not to base any investment on the fact that these mega events are in the pipeline.


One of the segments that may of particular interest is the increasing attractiveness of newly released compact apartments in cities such as Sao Paulo and Rio de Janeiro. These apartments are being snapped up by young singles or couples as both a lifestyle choice and a base of operation for urban professionals who spend the majority of their time either climbing the corporate ladder or enjoying the social and entertainment possibilities of cities well known for contributing significantly to the quality of life of the younger upwardly mobile careerists.

According to research by both developers and agents these up market apartments vary in price between R$7,000 (approx US$3,000) and R$11,000 (approx US$4,800) per square meter – which translates into a cost of R$400,000 (US$174,000) for a 34m2 apartment. Snug, but survivable and the sort of lock up and go option which appeals to the young urban professional. An added attraction of these apartments is that they allow those who work in the metropolitan areas to access places of employment without having to rely on an increasingly dysfunctional public transportation system.

An interesting trend is the development of even smaller ‘sub compact’ studio units in Brazil’s major cities – there are releases in Sao Paulo of around 21m2. These units offer some basic housekeeping services and can usually be found in the more affluent suburbs of Sao Paulo like Vila Madalena, Brooklin and Moema. Despite what may be viewed as hefty price tags for the square meterage involved these upmarket state of the art units are selling well, perhaps because they offer a low(ish) barrier to entry in these upmarket suburbs. Investors are especially attracted to these types of units due to heavy demand as rental properties.

compact rio apartment


Although foreign investors have been focused on Rio de Janeiro and Sao Paulo, there are other metropolitan areas of Brazil which may offer real value for the savvy property investor. These regional centers may be less affected by the euphoria and attendant property price contagion caused by the upcoming mega-events that will be hosted in Brazil and may therefore offer value when evaluated with a sober eye towards medium and even more importantly long term investment potential.


Manaus is the largest city in the Amazonas region and home to approximately 2.5 million people. The city is a major port located on the Rio Negro, a few miles before it meets the Rio Solimoes and combines to form the Amazon River proper and has been attracting interest from both foreign and domestic investors for some time.  The focus of investment has been the Centro, a region that rises above the river on a slight hill. Not coincidentally this is where most of the hotels and attractions are located.


Over the past three years the city has steadily increased its profile as a viable option for property investors. Many of these investors are of the opinion that the traditional investment opportunities presented by both Sao Paulo and Rio may not be delivering at levels that represent a combination of value for money and growth potential. During the period of 2010 to the first quarter of 2013 property sales in Manuas have more than doubled, growing by 100.38%.

In 2009 the majority of the housing developments were constructed to service domestic and local business demand, but that is now changing. Today there is an added emphasis on verticalisation. This shift is due in part to the lack of new land available for development and also reflects a global trend towards building up, rather than out. This shift in focus has attracted major construction for the region with several home-builders starting operations and enterprises in that city.

During the last decade, a system of federal investments and tax incentives has turned Manaus and the region surrounding the city into a major industrial centre.  The ‘Free Economic  Zone of Manaus’ is today a thriving and opportunity rich environment for foreign property investment as development continues at a frantic pace.

Whereas industry and commercial activity has traditionally been powered by rubber this industry is today in decline. Today raw materials such as Brazil Nuts and timber are still important sources of revenue for most commercial and industrial businesses. Petroleum refining operations and chemical operations also contribute to the regional economy and mobile phone companies like Nokia and Siemens have opened manufacturing plants in the area.

Although this mix may not make Manaus appear tremendously attractive for foreign investors nor boast the charms of Rio or Sao Paulo, the truth is that Manaus is fast developing and vibrant urban hub. Manaus is leveraging a combination of physical location, booming industry, as well as its status as one of the gateways to the natural beauty of the Amazon to power rapid growth.

Manaus is one of the cities that will host World Cup Soccer games in 2014 and it is worth noting that the city may be ideally situated to benefit from further growth in the eco tourism market.

The planned Manaus soccer stadium.

The planned Manaus soccer stadium.

During the past 12 months the most popular properties for investment were those ranging in size between 50m2 and 100m2. A recent survey of the Amazonas region showed that consumers were particularly interested in three bedroom apartments and properties priced between R$100,000 (approximately US$43,500) and R$200,000 (approximately US$87,000). Properties in this price range accounted for around 44% of all sales in the region and units sold ‘off plan’ were particularly well received. This focus may represent an opportunity for foreign investors looking to get into the Brazilian market at price points that are significantly lower than the buy in required in Brazil’s major cities.

The trend of increasing value for property investors looks set to continue for the remainder of 2013 and well into the medium term, insofar as anything can be certain in a country where macroeconomic fundamentals are receiving much needed attention.


Although a relatively unknown city by tourists who tend to congregate around the bright lights and undoubted attractions of Rio de Janeiro, Niteroi may be an undiscovered gem in the crown of Brazil’s property investment crown. Known as ‘The Smile City’ this pocket sized metropolis (it is home to around 500,000 people) boasts the highest Human Development Index in the region and is home to some of Brazil’s highest earners. It also has a reputation as a much more laid-back alternative to the hectic pace of the capital city.


Although popular as a vacation destination, foreign property investors may be attracted to the city due to the fact that the high level employees of Comperj, a petrochemical complex being built outside of Rio will undoubtedly be on the hunt for accommodation in Niteroi.

There is increasing recognition that Niteroi today represents excellent value due to the excellent growth prospects and combination of commercial appeal, industrial growth and sheer natural beauty.


This is a region that will continue to grow and benefit from domestic and foreign tourism due to the completion of the BR-101 highway that cuts through Brazil from North to South through the coastal states.  Foreign investors will be particularly interested in upmarket properties which offer between two and three bedrooms which both Brazilian and international property and investment pundits believe will offer superior value in the medium and long term.

Joao Pessoa beachfront.

Joao Pessoa beachfront.

These are properties which will reward the patient investor with an eye out for a bargain. Properties in on Natal and Joao Pessoa may be among the many investment options in this area. These are you properties that may fit all the criteria of the savvy investor, for purchase and rental or as quickly appreciating assets that can be disposed of at a tidy profit in the short term.


Increased job opportunities and development are powering the surge in interest in properties in this fast growing Brazilian region. Private investment in the region is at an all time high, but the savvy investor may still be able to ride the wave of development and renewed interest. Although regional growth has historically been driven by purchases by wealthy Brazilian sun lovers seeking a second coastal property this phenomenon was centered around the coast of Santa Catarina.

Today infrastructural development in cities such as Antonina, Guaraqueçaba, Guaratuba, Morretes and Paranaguá have also attracted the attention of both foreign and domestic buyers in the market for rental income generating properties. These areas are seeing increased numbers of new launches of upmarket developments which offer investors an easy entry into the Brazilian market, for a fraction of the cost of properties in the major urban areas of Rio de Janeiro and Sao Paulo.

Guaratuba Brazil.

Guaratuba Brazil.


The good news for foreign property investors interested in the possibilities offered by a recovering Brazilian economy is that there are no restrictions on foreign property investments in Brazil. In fact the Brazilian government actively promotes foreign investment in the Brazilian real estate market, with foreigners enjoying exactly the same property rights as native Brazilians when it comes to those properties classified as within the urban perimeter’. Essentially a good rule of thumb is that if a property has access to municipal services such as water, sewage, electricity and a well established road network foreign investors should be able to enter into the market with little or no  extra effort. One of the only restrictions is on the ownership of agricultural land.


The soundtrack of the streets has changed from the Samba, to calls for financial and regulatory reform as Brazilians express their dismay at the high cost of living. Taking into account these latest protests and the Brazilian government’s ongoing effort to address systemic weaknesses in the economy what exactly are the pros and cons of investing in property for rental income in Brazil’s major metropolitan areas.


  • Excellent growth prospects.
  • An economy that seems to be on the right track.
  • Infrastructure issues are being addressed.
  • Low cost of capital.
  • Stable interest rates.
  • Current low inflation.
  • Increasingly affluent middle class.
  • Brazil the focus of attention due to upcoming mega events.
  • Worldwide focus may encourage interest in Brazil as a long term investment destination.
  • Wide variety of property available at a number of price points.
  • Problematic tax structures are being addressed.
  • Access to credit is improving.
  • New initiatives to control criminal activity are underway.
  • Government focus on housing may provide additional incentives to purchase – resale opportunity.
  • Integrated housing developments are becoming more popular.
  • Increasing interest in smaller rental apartment units in urban areas provides investors with opportunity.


  • The macroeconomic issues of Brazil still require urgent attention from central government.
  • Consumer dissatisfaction with retail prices.
  • Threat of urban unrest and activism by consumers.
  • Crime remains an issue in urban areas.
  • A dysfunctional infrastructure.
  • Lack of government direction as far as macroeconomic policy is concerned.
  • Lack of disposable income affects resale (but may encourage rental).
  • Mega sporting events may have skewed property prices. Patience may be the name of the game.

When all is said and done there is a limit to how much can be read into the current economic situation in Brazil and whether or not it will act as a brake to foreign investors seeking value in the Brazilian property market. Unfortunately the Brazilian government seems to lack a direction as far as macroeconomic policy is concerned. However, there is no doubt that there is a focus on addressing the historical infrastructural problems and economic fundamentals which threaten the positive international attitude toward Brazil as an investment destination.

The major question on everyone’s minds when it comes to Brazil is whether or not the property boom is in the midst of a catastrophic meltdown. Many are of the opinion that the Brazilian property bubble has burst or is at the very least in danger of bursting. It is telling that one of the major Brazilian developers is on record as saying (during June 2013) that around 40% to 45% of apartments in Rio are today being purchased by investors rather than those seeking a permanent home. Although much investment activity across the globe is fueled by the every present group dynamic, these investors do not appear to be slaves to the opinions of many economists. They clearly see value in Brazil.

There can be no doubt that Brazil still offers value for the savvy investor. There are a myriad of different types of property available in a wide variety of regions, each suitable to the taste and risk tolerance of individual. It is up to these investors to decide whether or not historical trend analysis provides sufficient motivation to invest in the Brazilian property market, or if there are other regional markets that may offer better value at less risk.

The final word must go to a real estate student who was asked about property in Rio de Janeiro and responded:

‘(rio) has everything – beaches, sun and business all together and there’s not much more room to build. However much prices go up, there will always be people wanting to buy,’

His optimism may be as a result of his chosen field of study and his prospective livelihood, however at least part of this statement is unvarnished truth – there will always be people wanting to buy


A Futuristic Short Film HD: by Sight Systems

See on Scoop.itAugmented Reality

Sight, a brilliant and disturbing short sci-fi film by Eran May-raz and Daniel Lazo, imagines a world in which Google Glass-inspired apps are everywhere. Thi…

Steven Mallach‘s insight:

This is the future.


Disturbing? Perhaps.


Invasive? Certainly.


Fun? Undoubtably.

See on

Adding Value To Your Copy – The Six Degrees of Kevin Bacon Approach

Have you ever heard of a parlor game called ‘6 degrees of Kevin Bacon’? For those who haven’t, it can be fun but you really need to know your stuff about Hollywood blockbusters, TV and popular culture.

Here’s the background. In 1929, a notion that all people on earth were separated by no more than six hops was developed by Frigyes Karinthy, a Hungarian author, playwright, poet, journalist and translator. This notion gained quite a bit of momentum and was popularized in the movie Six Degrees Of Separation, and so an intellectual exercise became a game.


It’s not a complicated game. Here’s concrete example to help understanding. As the one picked to pose the puzzle I would give you two names. My choice for your challenge is Ronald Reagan and Nelson Mandela.

OK, so you have to build the link using up to six people. Here’s mine: Ronald Reagan defied sanctions against South Africa by agreement with Margaret Thatcher who discussed the issue with South Africa’s then President FW DeKlerk who later shared a Nobel prize with Nelson Mandela. Bingo, degrees of separation – two. Of course I had the advantage of knowing the two famous characters mentioned, but I’m sure that you get the idea.

There’s another variant (some say the original) where you can be asked to connect yourself to any random famous or infamous person. However, the variant that uses two famous people can pose bigger challenges.


Recent research by Facebook indicates that our interconnectedness is today even closer than six degrees. In fact Facebook puts the degrees of separation somewhere between four and five hops.

Facebook was able to come up with this number after looking at the relationship links of the 721 million user accounts. This data was reviewed with the assistance of a Milan University and the conclusion was that everyone was interconnected on average by 4.74 hops. The study is one of the largest of its kind and as Facebook has access to 721 million users, it meant that nearly 10% of the human population was surveyed and in total, 69 billion virtual relationships were examined. Wow.


Interesting in a way that would entertain the very bored you say?

Here’s the news; if you can master the mindset of six degrees of separation you can guarantee that your business writing as well as your creative and social media projects will not only be engaging to readers, but will also be original and stand out in an increasingly competitive environment.

Why is this? In a highly competitive increasingly globalised business environment there is one simple skill that an effective business writer will bring to the table to provide the business with extra value. It’s not the ability to structure an article, use grammar and language correctly or even to make sure that the subject matter and target audiences match the communication strategy of the company. Those are all ‘table stakes’ – what a writer brings to the table as part of their professional offering. You simply cannot play the game without these foundational skills.

Here’s the 6 degrees value add – the ability to gather seemingly random or unrelated information and pull these disparate data together into a cohesive whole that adds value to the professional writing that you provide will set you above the rest of the writing pack.

I’m not for a moment suggesting that you veer wildly off topic, just that you think carefully about the topic that you are writing about. You are the final arbiter of the relationships between the information you use – if it demonstrates the validity of your point or adds value then feel free to introduce your reader to a new viewpoint.

Today’s business writers are focussing more and more on engagement. Promoting engagement means you need to involve your reader in a dialogue, which in turn means that you have to provide unique and interesting information.

By providing this level of engaging content, whether you’re writing on the company website, in the social media or even providing copy for a piece of marketing collateral you can spark the imagination and start the conversation by motivating your reader to link to one of your company social media sites, your blog or even your website.

Here’s an example, based on a well known theory known as the Hemline Index. The Hemline Index is a theory presented by economist George Taylor in 1926. His theory suggested that hemlines on women’s dresses rise along with stock prices. In good economies, we end up with the 1960’s miniskirts seen in the 1960s and in poor economic times, like the 1929 Wall Street Crash, hems can drop almost overnight. Recent research confirms the correlation (but only up to a point).


Now tell me that isn’t fascinating? Who would have thought that there was a connection between the length and women’s skirts and macroeconomic performance?

As a writer you need to be interested in many things, a diverse range of interests is usually an indicator of a person who loves information and this usually means that they will be able to communicate this love of information in everything that they write.

Strangely enough it’s been our experience at Proof Perfect that great writers show an inclination toward reading matter and movies in genres such as science fiction or even historical fiction. We think it’s because these genres are fertile ground for developing a curious mind.

Today you don’t have to strain your brain to find connections between different subjects that will add a little spice to the more creative parts of your business writing. Connections or links are available to anyone who uses the Internet.


Set yourself a mental exercise and enter any business related term into your favorite search engine. Follow the most promising looking link and if you let yourself explore you will find that within half an hour you will be able to draw a connection between inner city housing values and the cost of peanut butter sandwiches (or any two more logical subjects).

Business writing can be extremely vanilla and formulaic. Sometimes the business writer needs to stick with an established formula – for instance there’s not a lot of room for imagination in writing an annual report (although imaginative concepts can be explored and have in fact won awards).

At other times, use your imagination. Use lateral thinking, draw from your own experiences or enliven your copy with infographics that draw a comparison between to seemingly unrelated topics. For example the amount of white papers written on the subject of mobile device usage every month would be higher than the Eiffel Tower if they were stacked one on top of the other. Or ‘A Chilli Crab in Singapore costs the equivalent of three Big Burgers’.


Your value as a writer is in part because you can make the leaps of imagination that others may not be able to make and convey those linkages in a succinct, understandable and engaging way. Once you have thought carefully about whether this approach fits into the framework of the project you are working on and the tone required from the client do not be afraid to explore the unusual.

Copywriting Advice from Bruce Lee – ‘Be Like Water’

Bruce Lee is probably the most well known martial artist of all time. His work in both Hong Kong and Hollywood started a craze for a number of different Asian inspired fighting styles which swept the world during the 70’s and 80’s. His influence on popular culture has been almost without equal.

Today, almost exactly 40 years after his death his likeness can still be seen on t-shirts, coffee mugs and merchandise of all types, including numerous action figure and desktop figurines. His movies still remain incredibly popular all over the world.


Lee, born Lee Jun-fan on the 27th of November 1940 in Chinatown San Francisco (but raised in Kowloon) traveled a long road toward fame, starring in a number of low budget Chinese language films prior to filming and releasing the first English language martial arts film, Enter the Dragon.

The success of Enter the Dragon propelled Lee to the very top of the Hollywood elite, where he remained until his death in Kowloon Tong in 1973 at the age of 32.

What many people do not realise is that Bruce Lee’s dissatisfaction with many of the martial arts styles he encountered led him to develop his own, called Jeet Kune Do (The Way of the Intercepting Fist). With the development of this fighting style came a new philosophy, based to a large extent on Taoism.


But what does that have to do with copywriting? Reading Bruce Lee’s books on Philosophy and examining various quotes attributed to him gives us an insight into not only a restless mind, but also provides a framework for a new type of approach to business, online and creative copywriting.

Let’s take a closer look at how the philosophy of Mr Lee can guide our thoughts on developing quality copy.

“All types of knowledge, ultimately mean self knowledge.”

Bruce Lee: The Lost Interview (1971)

Good writers have an absolute thirst for knowledge. When asked about how to become a better writer Stephen King’s advice to a fan was to read as much as possible.

Today you don’t even have to turn the first page (although we would strongly suggest that you pick up an ink and paper book now and then) you have access to the quite magical world of the Internet. Every topic that you can think of (and some that don’t bear thinking about) can be researched on the Internet. After doing the research all you have to do is put the words in order and hey presto, your job is complete.

Of course writing doesn’t really work like that. It’s not an easy way to achieve fame and fortune, but done well writing can make communication into one of the cornerstones of business success.

One of the best approaches is to find a topic that is relevant to your business and interesting to you personally. You’d be surprised how often this is not the case. The result is copy that really doesn’t sing to the reader, or engage them in any way and engagement is the way writers get consumers and readers to take action. This action can be related to building brand loyalty, starting a conversation, promoting the sharing of content across social media platforms or even directly feeding a sales funnel.


So how does the above Bruce Lee quote help us write better copy?

Know yourself, know what you are capable of and leverage this knowledge to find subject matter that that you enjoy. The only way that you will add value to a business as a copywriter is to be comfortable and happy with your subject matter.

“Don’t think, feel….it is like a finger pointing a way to the moon. Don’t concentrate on the finger or you will miss all that heavenly glory!”

Bruce Lee: Enter the Dragon (1973); In a training session with one of the temple students.

In copywriting one of the most important guidelines that you can use is to put yourself in the reader’s shoes and then look at the world through their eyes. Empathise with their needs and take into account the factors which contribute to their physical and mental well being.

In other words, stop thinking about the task of writing and start thinking about the bigger picture which is usually how your writing can add value to the lives of your readers. To do that you need to sit back and think about what makes them tick. Remember no man is an island and your readers are more complex than you may think.

Each of your readers is an individual, yet they share certain attributes (a family, a job, kids, bills to pay, holidays to plan) and psychological needs (Maslow had something to say about those needs).


Make sure that your writing is aimed at providing something useful to these readers to feed and satisfy their needs (even if it just a laugh at the end of a long day).


However, I would suggest that Lee’s philosophy be changed slightly to provide added value to the business writer, perhaps ‘First think , then feel’ would be more appropriate. So analyse your target audience, analyse the business strategy, develop your theme, key messages and tone based on this research and then set it all aside. Take some time to think about the people in the business and what they’re trying to say and who they want to reach.

You’ll be a better writer using both mind and heart.

“Man, the living creature, the creating individual, is always more important than any established style or system.”

As quoted in “From Wing Chun to Jeet Kune Do” by Jesse R. Glover

Bruce Lee could have been talking directly to business copywriters of today when he uttered those words. However, ignoring style guides and established approaches completely can be a trap for the unwary. These approaches have proven their worth time after time.

Style conventions provide writers, especially business copywriters with an established framework that makes business copywriting less of a chore and also aids writers in their job of conveying information and meaning clearly and concisely.

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There are however many writers who choose to throw off the shackles on convention and develop their own unique style and voice. These writers have usually served their apprenticeship writing using conventional forms and employing traditional stylistic guidelines.

You can do the same. However, be careful to ensure that your business copy reflects it s primary purpose, which is to convey valuable information about the brands or services of the company in a way that is easily understandable by the target audience. Before you begin developing your own style you should make every effort to understand and master the conventional approach to business writing.

My advice: Read annual reports (you can skip the boring numbers) and other marketing collateral developed by professional business writers. Take some time and read the business sections of publications such as the New York Times at least once a week. Information is power so also make sure that you continually scour the Internet for great examples, tips and tricks from the gurus of business writing. There is more advice out there than you could probably access in a lifetime of study. The challenge is to sort to wheat from the chaff. Keep at it, the good stuff is out there.

By putting aside the time to do these simple tasks you will develop an in depth understanding of different styles and take the first step to developing your own, unique style of writing.

“Don’t get set into one form, adapt it and build your own, and let it grow, be like water.  Be water, my friend.”

Bruce Lee: A Warrior’s Journey (2000); here, Lee was reciting lines he wrote for his short lived role on the TV series Longstreet

This probably the best known of all of the wisdom based on the philosophy of Bruce Lee.


How does this apply to the practice of copywriting?

Just as water can take on many forms and is able to fit into any space the business copywriter of today must be able to master many skill sets. He or she must be able to find reliable sources of information and convey that information in a logical and concise manner, in language that the target readership finds engaging and easy to understand.

Once you can master the ability to find and convey information in a logical and succinct manner your career as a business writer will be well and truly on track and you can set your sites on fame, fortune and a seat on the Board.

In my opinion one of the only ways to diversify your skills is to read articles by the best in the business. There are numerous websites out there which feature articles by some of the best in the business. Set aside an hour a day and look for articles on your chosen area of expertise. Create a folder on your laptop and file the best away; you’ll be glad you did.

If you use the Internet as much as I do (and what writer doesn’t?) find a site like which will allow you to ‘scoop’ interesting or well-written pages on the fly. If you don’t make an effort to provide find content that will allow you to provide a unique viewpoint, chances are that your writing will be lost in the noise of millions of similar pages when readers are searching for that one piece of essential information.

“Make at least one definite move daily toward your goal.”

“Beyond System — The Ultimate Source of Jeet Kune Do”

If you can commit to a single action every day that will contribute to your future success then you’ll soon reach the heights of the copywriting profession.

Our advice; look to the social media. Join LinkedIn groups and make sure that your Facebook and Google+ pages have new content every day. Source interesting articles, comment and share with others. Building your network and establishing yourself as an expert in your field, or at least as someone with a thirst for knowledge and something interesting to say is one of the foundations of success. Keep posting and keep an open mind, try and make connections between seemingly unrelated pieces of information. You will be amazed at the results.


This tiny, wearable patch makes you invisible to mosquitos

See on Scoop.itFunny, odd and interesting

A mosquito can detect the carbon dioxide emanating from a prospective meal from hundreds of feet away. The Kite Patch, a small, non-toxic sticker that you place on your clothing, can jam a mosquito’s CO2 radar.

Steven Mallach‘s insight:

This has the potential to revolutionise malaria prevention worldwide.


People are beginning to take crowd funding for granted, however pause and think about how democratising funding for projects like this is making a huge difference to the products that are destined for market.


Although the success rate for crowd funded products is low, the approach allows ordinary people to contribute to the success of products from concept to reality.


By looking at crowd funded projects we can get a good idea of trends around real market needs. Tracking these trends gves us a good idea of the the wants and needs of specific regional and global consumer groups and in itself that is valuable information.


See on