Diary of a UK Stock Investor 181 - This Will Change The Way You Pick Stocks
Mar 26, 2026
A deep dive into how legendary investors choose rare stocks and when to buy big. A practical look at treating stocks like businesses and why free cash flow beats headlines. Walkthroughs on free cash per share, reinvestment choices, and screening for high cash returns and moats. Advice on staying focused during market noise and thinking in per-share cash terms.
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Treat Stocks As Whole Businesses
- Investing equals owning a business, not trading a ticker symbol.
- Chris Chillingworth frames each share as a slice of a company you would evaluate like a business with cash generation and competitive advantages.
Woodland Example To Show Productive Assets
- Chris considered buying UK woodland and examined timber harvesting as a small income source.
- He used the example to contrast investments that produce ongoing returns (farmland/woodland) with commodities like gold or Bitcoin that produce nothing.
Measure A Company's Return By Its Free Cash Flow
- Focus on total free cash flow the company generates, not only the dividend paid to you.
- Chris explains that retained surplus cash still belongs to shareholders because it increases the company's value and can be reinvested to compound returns.