Plus: Survival Bias, Softbank, Diem Done
Welcome to another issue of Net Interest, where I distil 25+ years experience as an investor and analyst in financial services into a weekly email. It’s coming up to our one year anniversary and I’m grateful to all subscribers for joining me on the journey – there are now 17,500 of us here. Please do get in touch via Twitter or by hitting Reply if you’re reading this on email. And don’t forget to invite your friends, family and coworkers to sign up too!
A few months ago, I wrote a very popular piece about the American mortgage product. Mortgages are pretty standard fare in the world of finance, but the American version is special: it grants its user a free option to refinance if they can get a cheaper rate elsewhere. Last year, interest rates fell and a record number of borrowers took up that option to remortgage at the new low rates.
For companies that originate mortgages, it was boom time. The largest, Rocket, saw its revenues rocket (sorry) by 3x versus the year befor…