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Jd Jeff deGraaf On RenMac

“As an investor, it's not binary. It feels like it's binary, but it's not. Just like a car lease, it all depends on the time frame. If you're pricing things as if the payback is two or three years, and you throw an 18-month or two-year moratorium or anything that pushes that time frame out, we always talk about the kink in the hockey stick. That kink ends up being out further. That greatly impacts the valuation of these names.”

RenMac · October 2026

“As an investor, it's not binary. It feels like it's binary, but it's not. Just like a car lease, it all depends on the time frame. If you're pricing things as if the payback is two or three years, and you throw an 18-month or two-year moratorium or anything that pushes that time frame out, we always talk about the kink in the hockey stick. That kink ends up being out further. That greatly impacts the valuation of these names.” — Jeff deGraaf, RenMac

Context

The panel was discussing whether talk of curbing data centers would turn into policy after the midterms. deGraaf says the main effect of slower approvals is on payback timing, and so on the valuations of companies building the data centers, even without a full ban.

Listen to the episode → More from Jeff deGraaf →

Transcript

RenMac Around 38:16 into the episode
Jeff deGraaf

…to take the other side and gain some control. And then once they're in, they'll be a lot more friendly to the AI trade and the data centers. Or do you think they draw a hard line in the sand and Bernie Sanders is like, we have to regulate everything and we can't do anything? Where are you on that?

Speaker 4

…I think a lot of the incentives and things are just too much for a lot of these governors and local leaders to pass up. So I think it's just sort of like, you know, the BART being worse than the bite, making these approvals conditional. And I suspect that's the direction of it to move forward.

Jeff deGraaf

Well, so just keep in mind, as an investor, right, it's not binary. It feels like it's binary, but it's not, because if you're, if, you know, just like a car lease, right, it all depends on what the timeframe is, right? So if your payback, if you're pricing things as if this payback is two or three years, and you throw an 18-month or two-year moratorium or, you know, anything that pushes that timeframe out, that we always talk about the kink in the hockey stick, right? That kink in the hockey stick ends up being out further. That greatly impacts the valuation of these news, right? And that's what people need to understand.

Speaker 4

And I would say, I think that's probably the direction of where it's headed right now. You're looking at longer approval time to sort of at least have the politicians, local leaders go through the facade of reviewing these things. And then you're probably looking at increased costs too. Not only…

Steve Duttenhoffer

Well, they say all

Speaker 4

politics is local, right? That's what they say. There you go. All right. Neil, what are you watching this week?

Speaker names come from our own diarization. The position is estimated from where the line sits in the episode.

More from RenMac

“The problem with bounces is that you have to make two very good calls. You have to buy them right and you have to sell them right. And guess what? If you make just one good call, it's not going to work.” — Jeff deGraaf, RenMac