Miles P.H. Seifert, chairman of Gray, Seifert & Co., sounds like a real estate agent when he summarizes his guiding principle for investing in banks: location, location, location.

Gray Seifert manages $700 million, about 40% of which is invested in banks. the bank portfolio is up 11% this year; last year it was up 22%. The New York money manager has stakes in 33 banks. Most are regionals in fast-growing areas of the country, such as the Rocky Mountains, the Midwest, and the Southeast. Often, Gray Seifert is among the biggest shareholders. Mr. Seifert describes himself as "wildly optimistic" about the industry.

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