Why Investors Are Staring at An Earnings Mirage

The video explores Jesse Livermore's thesis on how inflation distorts book value and earnings, affecting market valuations. It discusses the integrated equity model, which suggests the market may not be as overpriced as it seems. The video highlights the importance of free cash flow over traditional metrics like price-to-book and ROAE, especially for value investors. It also addresses the behavioral aspects of value investing and the challenges in adopting new metrics like free cash flow in ETFs.

In what ways can free cash flow be considered a better metric for evaluating investments?

What reasons are given for the slow adoption of free cash flow as a widespread factor in investment strategies?