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9:00 AM EST, Tuesday, February 3, 2009: Slowly, slowly, the bargains are appearing. The story is simple. The banks have real estate loans that have gone bad. They can't carry them on their books forever. They can't manage them -- collect the rents, fix the roof, etc. They need the cash.

Buy distress real estate now -- or in coming months when there'll be more (and maybe cheaper). You will be assured of quadrupling your money in three years. Keys:

1. Patience. Banks don't like selling assets at less than they paid for them (more correctly -- what they loaned on them). They are dribbling these out. Bankers have the same ginormous egos you and I do.

2. You must cultivate relationships with your local banks and key brokers. Make sure they know you're in the market. When they sell, they often sell fast and often to their favorite people. Make yourself a favorite person.

3. Get your friends together. Better to spread your meager shekels over five properties with five friends than blow it all on one property that may have hidden "gotchas."

4. Bid low. Bid firm. Bargains are just appearing. There'll be an avalanche in coming months. There is no urgency to buy now. They'll be cheaper later. Bid ultra-low. The major determinant of profits in real estate is the price you paid. Repeat after me: It's the price we buy it that determines how much we make.

5. Bid only on developed properties with cash flow. You don't want half-finished buildings or raw land. Trust me. You don't want raw land. Though God isn't making more land, there's still plenty of it -- especially in California, Arizona and Florida.

Four to five times your money in three to four years are the rewards for being in cash. Cash is King. Hallelujah.

How bad was the real estate "boom" in Florida? It was ugly. You must read George Packer's piece "The Ponzi State" in the latest New Yorker:

My favorite excerpt from this ultra-long piece:

By 2005, the housing market in Florida was hotter than it had ever been and the frenzy spread across all levels of society. ...Nearly everyone you met around Tampa had a Realtor's license or a broker's license or was a title agent. ...."When the yardman comes and says he's not going to mow your hard anymore because he's going to become a mortgage broker, that is a sure sign that something is wrong." Flipping houses and condominiums turned into an amateur middle-class pursuit. ... Ross Baurer, a manager at a Toyota dealership in Tampa, told me that between 2000 and 2007 he bought and sold half a dozen properties, in a couple of instances doubling his money within two years. ...

"I wish I could say that the market here was driven by end users and retirees, but it wasn't. Two-thirds were speculators. You could flip 'em before you had to close on 'em."

The New Yorker abstracts the article thus:

Writer visits a number of inland real-estate developments near Tampa, Florida. Developers there dreamed up instant communities, parceled out lots, and built look-alike two-story beige and yellow houses. The houses sold to some of the thousand or so people who moved to Florida every day. Now many are ghost subdivisions. In one community, Twin Lakes, property values dropped by more than a hundred thousand dollars in the past two years. Writer interviews Angie Harris, a Navy veteran and mother of five, who says of her neighbors, “It used to be people would wave. Now they don’t.” In another community, Hamilton Park, the writer interviews a woman named Lee Gaither, whose only income came from Disability payments. She was facing eviction and planned to sell many of her possessions on eBay. Florida is one of the places where the financial crisis began. Gary Mormino, a professor at the University of South Florida in St. Petersburg, tells the writer that, “Florida, in some ways, resembles a modern Ponzi scheme. Everything is fine for me if a thousand newcomers come tomorrow.” The state depends for revenue on real-estate deals and sales taxes. By 2005, the housing market in Florida was hotter than it had ever been. Flipping houses and condominiums turned into an amateur middle-class pursuit. Writer tells about Floridians with modest incomes who made money buying and selling real estate. Mentions one case in which a house appreciated in value by almost fifty per cent overnight. According to an investigation by the Miami Herald, government oversight of the real-estate market was so negligent that more than ten thousand convicted criminals got jobs in the mortgage industry. Flipping and fraud burst the bubble. But in places like Pasco County, it was the ordinary desire of ordinary people to buy their own home that turned things toxic. Tells about Anita Lux, who moved to Florida from Michigan with her husband, Richard. Gives a brief history of Cape Coral, Florida, which was first developed in the fifties by two businessmen from Baltimore. Writer interviews a number of Florida residents who have lost their jobs or homes. A Fort Myers real-estate agent named Marc Joseph tells the writer, “Greed and easy money. That was the germ.” By last year, the highest foreclosure rate in the country could be found in Fort Myers and Cape Coral. Mentions other indicators of the economic hard times, including the closure of auto dealerships and the theft of copper. Writer visits the office of Tampa’s mayor, Pam Iorio, who is determined to build a light rail system to revive the city’s fortunes. A number of people in Florida told the writer that the state needs a fundamental change in its political culture.

It's a fascinating article how the boom happened and the resulting abject poverty that it's thrown many Floridians into. You can't read the full piece online, unless you're a subscriber. Buy a copy on the newsstand. Recommended.

Time to watch all the Super Bowl ads? If you didn't get your fill of them, you can watch each of them and vote on the best and the worst. Go to the this Wall Street Journal site and watch them all.

I'm guessing you have nothing better to do with your time.

False "sales" abound. Eddie Bauer sent me an email promoting 70% off on their Winter Clearance.

In fact, they'd raised prices on many items, including the jeans I wanted.

Everyone is announcing "sales." We expect them. Many retailers have figured that with our expectations, now is the time to raise prices. They think we're idiots.

Most useful travel gadget:

This is six inches long. It takes one outlet and makes it into three -- one on one side and two on the other. Radio Shack sells it for $3.99 online. Don't leave home without it.

Actual conversation this morning:
Harry: Are we going to have to spend our old age together?

Susan (wife): Got a better idea?

Even better things about the Canon G10. This is now my favorite "point and shoot." It is much heavier than lighter point and shoots, like the Canon SD990 IS (which I'd recommend if weight and size are critical).

The G10 has a thousand useful features the smaller SD990 doesn't have. Ones I like:

1. Underexposure wheel. Most pictures look better when you underexpose by 2/3rd of stop. You can see the results on the big 3" screen before you take the photo. Most useful.

2. Framing for 4" x 6" prints. You can gray out the top and bottom of the screen. This will fix the problem of chopping heads when you print your photos.

3. Manual settings. There's C1 and C2. You can have two sets of manual settings permanently ready. I have one for black and white and high ISO. The pictures look just like Tri-X. No red eye in black and white.

4. Instant movies. You can make an non-stop hour movie with this thing. The results look as good as any camcorder.

5. Ultra-fast playback and finding of photos. The fastest and easiest I've ever seen.

6. Flash shoe for an external strobe. Very useful when you need the extra oomph.

7. Eye focus adjustment. It has a semi-useful viewfinder which show 70% of the frame. But sometimes you need it. It's faster and steadier than holding the camera and shooting with the screen.

Read a full review on dPreview. Amazon sells the G10 for $405, which is $60 less than I paid.

New York City "Humor"
+ Tourist walks over to a taxi cab driver and asks: "Can you tell me where the Empire State Building is or should I go f..k myself?

+ Tourist asks policeman where the nearest subway entrance is. Policeman answers, "I'm sorry. You can't get there from here."

+ Overheard in subway, "Mary, quit bitching. I made the date with Lisa three months before you and I were married."

And, from this week's New Yorker:

I played seven hours of singles tennis on the weekend. I didn't think I could. I did. It was great. There's a lesson here somewhere.

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads on this site. Thus I cannot endorse, though some look interesting. If you click on a link, Google may send me money. Please note I'm not suggesting you do. That money, if there is any, may help pay Michael's business school tuition. Read more about Google AdSense, click here and here.