When Warren Buffett bought Disney stock in 1966, its market cap was under $90 million despite $21 million in pretax earnings and more cash than debt — a classic Ben Graham bargain.
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At 2:41:00 · chapter starts 2:33:48
Coming out of the war, Disney has no new IP pipeline, a fractured animation team, and real competitors for the first time. Warner Brothers has Bugs Bunny and Daffy Duck, designed in part by a former Disney story department employee. Hanna-Barbera's Tom and Jerry launches in 1940 for MGM. Disney tries shorts packages, the live-action Treasure Island filmed in London with blocked European cash, and nature documentaries like Seal Island. Walt studies the emerging TV medium but decides to wait. His heart is in animation, and he ultimately delivers an ultimatum to Roy: either fund Cinderella, or sell the company. Roy capitulates and raises $2 million. Made using live-action reference footage as a crutch (a technique Walt finds artistically compromised), Cinderella still earns $8 million in film rentals on a $2.2 million budget — Disney's biggest financial success since Snow White. It doesn't solve every problem but restores creative momentum. Alice in Wonderland follows and loses money, as Roy's 1951 annual report notes with diplomatic euphemism about 'generally poor attendance at theaters.'
In 1966, Warren Buffett bought Disney stock with a market cap under $90 million — while the company was doing $21 million in pretax earnings and had more cash than debt. Ben calls it both Ben Graham bargain investing and Charlie Munger investing. Today, 99.95% of Disney's value has been created since that purchase. Buffett eventually sold. He still regrets it.
Looking at Disney's market cap at Walt's death in 1966 versus today, 99.95% of the company's total value was created after Walt died, illustrating the vast runway of the business model he created.
Despite months of meticulous preparation, Starter Story's initial launch attracted zero users — a humbling reminder that building alone guarantees nothing.
A single Reddit link post quickly drove 100 visitors to the Starter Story website, igniting the founder's belief in social traffic.
After reformatting content as a native self-post (no direct link spam), the post exploded with hundreds of upvotes and thousands of readers.
By posting again and again with the native-content strategy, the founder's posts repeatedly hit Reddit's front page, reaching millions of readers.
Before Reddit banned his domain, the founder converted his viral traffic into an email list of tens of thousands — a self-owned audience independent of Reddit.
Redditors eventually organized a petition to ban starterstory.com posts, effectively ending the Reddit growth channel — but the email list was already built.
The Reddit attention strategy ultimately served as the foundation for a million-dollar business, proving that free distribution channels can replace paid marketing.
The key tactic was keeping content fully on-platform (no direct link spam), then adding a small link at the post's end for users who wanted more.
With a thriving email list and a self-owned audience, the founder quit his six-figure New York City salary job to go all-in on Starter Story.
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