Investors looking to add to their fintech portfolio should consider Nelnet (NNI 0.49%) and Upstart (UPST -19.71%).

These are two of my top 15 positions, and I don’t plan on giving up any of them. In terms of maturity, risk-reward, and other factors, I wouldn’t call that a fair swap because the businesses are so different to one another. Nelnet is for individuals who aren’t aware they have a huge portfolio of government-backed student loans on their books, which Jim Gillies likes to compare to an iceberg slowly melting. It’s billions of dollars in cash.

If we do see student loan relief, it will be from the government-backed ones, so it’s basically the government writing Nelnet a check and giving them that money quicker, so there’s no risk even though there is some headline risk. They also have a large servicing portfolio where they’re making income off of these other firms by managing their debt.

It’s really a capital allocation strategy since they have all this money, and what they do with it from here is the question. If you’ve spent money on FACTS Management or PowerSchool (PWSC 1.36%), I think with any of these services, a significant amount of your financial management projects for the colleges are based around it. They have a variety of companies like that. That company is fantastic. I’m invested in it, but it’s a significantly different risk-reward than Upstart. I personally own them both, and I wouldn’t trade one for another, but both of those firms are wonderful to me.

To put it another way, I’d say they’re two distinct businesses.

I came across them when my daughter was going to be a sophomore in high school, and I had not yet started making significant payments to a firm called FACTS Management. When she was in kindergarten, I heard about it and decided to look into it further. They basically have a printing press for cash and then finding out what else was in the company, so yeah, I would say a good investment choice.