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He explained very clearly how he arrived at it. He used the Russell 1000 Index (which is the largest 1,000 U.S. stocks by market cap). He used the market cap weighted free cash flow yield for each day of the last 20 years. In only 13% of the days has it yielded a higher free cash flow than now.

He went on further to say when it has been this cheap it has given a 17% return over the next 12 months and a mid 30's over 2 years. He also said "It’s a very attractive time to invest in the market, despite the run-ups that we’ve seen in the last year."
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This is an important insight by itself. Consider the possiblity of having a couple of moving averages linked to this metric. It may be more of a point in time observation with a probability forecast feature that can be updated daily/weekly/monthly... you get the picture.

I think it also important to note that he relates a story in the article of doing his own due diligence on a company that ranked high. Although he found great qualitative reasons for dismissing the ranking (the company was essentially losing a patent for its main profit stream), he stuck with his system, invested anyway and turned a hefty profit before the company's ranking fell and was sold.
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