TIP671: Unconventional Value: Contrarian Thinking and Outperformance w/ Larry Connor

We Study Billionaires - The Investor’s Podcast Network

Stig Brodersen

Education, Investing, Business

4.6 • 3.6K Ratings

🗓️ 27 October 2024

⏱️ 55 minutes

🔗️ Recording | iTunes | RSS

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Summary

On today’s episode, Kyle Grieve chats with Larry Connor about why being different is crucial to outperformance, why turning over the most rocks and ruthlessly eliminating opportunities is vital to success, why Larry searches for “train wreck” apartments to optimize, the importance of investing counter-cyclically, how being unconstrained by conventional thinking has propelled his success, the critical importance of being disciplined to your core values, and a whole lot more! Larry Connor is the founder and managing partner of The Connor Group. He founded the Connor group in 1992 with $400k and one investor to purchase three apartment communities. Today, the business has over 1,300 investors and $5 billion in assets. It operates in 18 markets across the United States. Larry is also the founder of The Connor Group Kids & Community Partners, a non-profit organization that helps disadvantaged kids in communities where The Connor Group operates. IN THIS EPISODE YOU’LL LEARN: 00:00 - Intro 09:17 - The power of thinking of assets as operating businesses 12:11 - Why process is so essential in the refining process for filtering ideas 15:05 - Why Larry looks to purchase train wreck operations, he can optimize at the highest possible rates 17:51 - How utilizing counter-cyclicality is vital to outperformance 20:36 - Why you should position your business to grow during economic turmoil 21:33 - Why to think of failure as a learning experience and why failing is necessary to have exceptional returns 32:51 - The importance of people, plan, process, and perseverance in the success equation 35:30 - The importance of treating employees as owners and how Larry successfully aligned incentives 39:14 - Why being unconstrained from conventional thinking is so important 44:19 - Why long-term thinking has been so powerful for building conviction during economic downturns and how that long-term thinking has been vital to success And so much more! Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences. BOOKS AND RESOURCES Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, Kyle, and the other community members. Follow Larry Connor on LinkedIn. Learn more about Larry Connor here. Follow Kyle on Twitter and LinkedIn. Check out all the books mentioned and discussed in our podcast episodes here. Enjoy ad-free episodes when you subscribe to our Premium Feed. NEW TO THE SHOW? Follow our official social media accounts: X (Twitter) | LinkedIn | Instagram | Facebook | TikTok. Check out our We Study Billionaires Starter Packs. Browse through all our episodes (complete with transcripts) here. Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool. Enjoy exclusive perks from our favorite Apps and Services. Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets. Learn how to better start, manage, and grow your business with the best business podcasts. SPONSORS Support our free podcast by supporting our sponsors: River 7-Eleven Toyota Daloopa Bluehost TastyTrade Miro Public American Express The Bitcoin Way ReMarkable Fundrise Facet Onramp SimpleMining Vanta Shopify HELP US OUT! Help us reach new listeners by leaving us a rating and review on Spotify! It takes less than 30 seconds, and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it! Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Transcript

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0:00.0	You're listening to TIP.
0:03.0	Today, I have an unconventional guest on the show who has returned 30.4% per atom since 1992.
0:10.0	He's unconventional in many ways.
0:12.0	But the primary reason he's different from many of the other guests that I've spoken to is because he comes from the real estate industry.
0:18.0	Since inception, his returns have outpaced those of some of the best asset management businesses in the entire world such as
0:24.6	Brookfield and Blackstone. Now what drew me to Larry was his ability to think
0:28.8	about investing in real estate as distinct business units. Instead of considering the Connor Group's
0:34.0	apartments as kind of you know set it and forget it investments he and his team
0:38.4	actively improve the underlying business inside of each apartment complex. He successfully increases the
0:44.4	operating margins of the apartment complexes by an astounding 60 to 80 percent
0:48.8	within just a few short years of ownership. This is tremendous value creation and I think it's worth researching
0:53.7	a little bit more how he does it. Larry considers himself an investor in real estate, not
0:58.5	simply a real estate investor. He's used his past knowledge and experiences, including his successes and more importantly his failures, to design his business in his view.
1:07.0	He is a contrarian, which I greatly appreciate as a value investor.
1:12.0	A couple great examples of his contrarian nature are that he
1:15.1	doesn't hire from within the real estate industry. He deploys capital during
1:18.8	economic downturns. He's paid particular attention to aligning his employers with the investors of his company.
1:25.5	He deploys long-term thinking.
1:27.9	And he doesn't come from a traditional financial or real estate background.
1:32.2	Another fact about Larry that I found really interesting
1:34.2	was his take on risk.
1:35.9	Larry is someone who has done some hazardous activities
	...

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