We are seeing these negative events happening now. What happens to GSY's business if we go even deeper into an economic downturn ? One could argue that the economy isn't currently great now, however we've seen it get way worse in the past. GSY was down about 76% from highs (worst case) in the past. Since the Sep. '25 highs, we're closing in on that point here. Your comments on that scenario ?
It is a good point in that as a business you don't want to be on your back foot in case a bad environment hits and you have less optionality to get through whatever storm has come. We might argue that this is correlated to the overall slowdown, vs being a separate item, so they would likely already be working through some of this scenario if it were to come true. The forecasted charge off rate would also include management estimates across the entire loan book, opposed to Lendcare alone, so we think if management is seeing weakness elsewhere, it is likely being incorporated here as well and they are already seeing elevated charge-offs before this. GSY has managed downturns well in the past, but credibility is shot now and the past (good) execution cannot be relied on as much.