Description

Americredit is a specialty finance lender serving the sub-prime and
non-prime used auto market.

The stock has declined sharply for the following reasons:

1.) general market weakness.
2.) fears that an economic slowdown will create a credit delinquency issue.
3.) massive credit problems at Providian, another subprime lender.
4.) ACF's own announcement that the economic weakness has resulted in
an uptick in non-performing credits.

On the way down, a very large short interest has developed amounting to
20% or so of the shares outstanding.

ACF is on a June fiscal year. Current earnings estimates $3.50 for the
June '02 year and $4.35 for the June '03 year.

ACF reminds me of Wells Fargo in 1991. The crux of the issue is this:
is the company a superior lender, or not. The shorts are making certain
generalized assumptions on asset quality and exposure. The longs are
betting on the company's excellent history and well-articulated lending
methodology.

THIS COMPANY PROVIDES MORE AND BETTER DISCLOSURE THAN ANY OTHER COMPANY
I HAVE SEEN. INTERESTED ANALYSTS SHOULD GO TO THEIR WEBSITE AT
WWW.AMERICREDIT.COM. AVAILABLE DATA INCLUDES DETAILED MONTHLY INFORMATION
ON ALL OUTSTANDING SECURITIZATION. THEY HAVE KINDLY ARRANGED THE DATA
IN EASY TO DOWNLOAD SPREADSHEETS. ALSO DOWNLOAD THE THREE PART REPORT
FROM THEIR RECENT ANALYST DAY PRESENTATION.

This is a very cheap stock with an excellent and robust business model.
Short sellers have mistakenly confused a cyclical decline in credit quality
with a sytemic delinquency issue.

Highlights of the ACF presentation include:

1.) the company is on its third generation proprietary credit scoring
model. each generation is a more refined model and has produced better
results. the company will implement a fourth gen model in early '02.

2.) with the exception a minor uptick in the most recent quarter, credit
quality has improved consistently for the past five years.

3.) lower short term interest rates have caused the company's net interest
margin to increase from 12.5% to 14.7%. credit loss expectations can rise
from 4.0% to 5.7% and net margins will still remain flat. current
expectations are for the loss experience to rise to the high 4%, which
would imply an actual expansion of the net margin.

4.) earnings guidance from the company already factors in a recessionary
environment.

Catalyst

A bottoming of the economy will ease fears of a massive credit quality
problem. A very cheap valuation combined with a large short interest
may send the stock much higher quickly.