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Adaptive Markets

Financial Evolution at the Speed of Thought
Narrated by: Jonathan Yen
Length: 20 hrs and 21 mins
4.5 out of 5 stars (197 ratings)
Regular price: $38.49
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Publisher's Summary

Half of all Americans have money in the stock market, yet economists can't agree on whether investors and markets are rational and efficient, as modern financial theory assumes, or irrational and inefficient, as behavioral economists believe - and as financial bubbles, crashes, and crises suggest. 

This is one of the biggest debates in economics, and the value or futility of investment management and financial regulation hang on the outcome. In this groundbreaking book, Andrew W. Lo cuts through this debate with a new framework, the Adaptive Markets Hypothesis, in which rationality and irrationality coexist. 

Drawing on psychology, evolutionary biology, neuroscience, artificial intelligence, and other fields, Adaptive Markets shows that the theory of market efficiency isn't wrong but merely incomplete. When markets are unstable, investors react instinctively, creating inefficiencies for others to exploit. Lo's new paradigm explains how financial evolution shapes behavior and markets at the speed of thought - a fact revealed by swings between stability and crisis, profit and loss, and innovation and regulation.

PLEASE NOTE: When you purchase this title, the accompanying reference material will be available in your My Library section along with the audio.
©2017 Princeton University Press (P)2018 Tantor

What members say

Average Customer Ratings

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    5 out of 5 stars
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    5 out of 5 stars

Most therapeutic book I’ve read

If you were/are a trader burnt by the market, this is the book for you. General people, even psychologists, will likely misinterpret your pain and aftermath symptoms. Not a lot of people can comprehend what you had just went through.

Lo will provide useful advice on how to cope, reminds you that you are not alone, this temporary fall is not a representation of your intelligence whatsoever and; there is hope to use your skills for greater good.

Thank you to the author, you have flipped my life around.

3 of 3 people found this review helpful

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Eye opener and unique insights

this book literally makes you rethink how you originally thought about financial markets. it's insightful and I would say a more complete picture of what happens in the markets. I always felt that there something missing in mental model of how markets function because I have been observing them for a long time and this book fills the gaps and enabled me to reimagine things in new light.

1 of 1 people found this review helpful

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Skip it

The whole book can be summarized by saying that markets are not ALWAYS efficient and can be influenced by greed, fear, innovation, or fraud and that markets need to continually adapt to changing influences. You waste chapters going through which parts of the brain produce which emotions which is completely pointless and frustrating. Then when you finally get the economics it is a huge let down. Nothing new or actionable.

2 of 3 people found this review helpful

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Instructive & innovative

A fresh look at the structure of economic behavior on the individual and systemic levels. Lo offers insights from behavioral psychology and behavioral finance but moves beyond individual fun facts to construct a framework for understanding how our behaviors amass into the system wide forces affecting economics in general and financial economics in particular. He then takes this more dynamic and realistic model for understanding human economics and applies imagination to paint pictures of possibility for the future.

Financial systems are comprised of human decisions--let's decide to make those systems the kind that can create more good things in the world and solve some of the troubling problems we face as a whole.

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  • r
  • 10-05-18

Quants and physics

It's nice to know that people are moving beyond these older models. I found this book more confirming than inventive.

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Slow buildup leading to deep insights

I'm not an expert in finance or economics, but A.W. Lo seems to be cited highly enough to imply that he is.

This audible is a bit slow at first as Lo builds up his arguments in favor of his Adaptive Markets Hypothesis. He warns and apologizes to the reader in the intro about the extensive length required for the book to relay his intended message. He spends a lot time upfront on evolutionary and developmental biology, then behavioral economics, and finally leads into implications for financial economics.

I think he pulls it all together very well, and the narrator does a great job adding interest so it doesn't feel so long and drawn out.

I started this audible soon after finishing The Money Formula, by Paul Wilmott. I think the two books complement each other well.

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Made finance enjoyable

If you could sum up Adaptive Markets in three words, what would they be?

Made finance understandable.

What other book might you compare Adaptive Markets to and why?

The only one I can think of right now is "Black Swan." But this one is straightforward whereas the the other one is little pompous.

Which scene was your favorite?

Not applicable.

If you were to make a film of this book, what would the tag line be?

Not applicable.

Any additional comments?

If you want to understand finance from a leading expert who explains it without using any formulas, then get this book. It is long but well worth the effort. You will be much smarter than before.

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pie in the sky socialist finance marketing.

listened twice. ideas outside the box. analaogy: written by someone from the marketing Dept of a finance magazine

0 of 1 people found this review helpful

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Good book, but takes to long to say to little

Really liked this book, but it could easily compile the important parts in a a fifth of the time. It takes too long to say almost nothing...but it has fairly good content.

0 of 1 people found this review helpful

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Don't Bother

This book reads as if the author's first attempt at writing was only 50 pages long, and his publisher said, "We need more. Expound upon every last detail, no matter how minute." The book is repetitive and the narrator repeats time and again, "Evolution at the speed of thought" not only as if it's the most profound thing we've ever heard but also like it's the first time he's ever said it and he's revealing the epiphany for the first time. I was unable to finish this book. After what seemed like several chapters of worshipping Darwin, droning on and on about the peppered moth, he never really seems to get to describing his theory. I was hoping to find some alternative to the Efficient Market Hypothesis, but all I got was some disjoint tome about evolution, the amygdala, and how an MRI is administered. Not at all informative. Will NOT read this author again.

0 of 1 people found this review helpful

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  • Fishforreal
  • 06-15-18

Interesting hypothesis

As a lay person it was very interesting to hear about the hypothesis of Adaptive Markets I am not really qualified to critique the theory but it was certainly interesting.

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  • See Yung phang
  • 06-10-18

Great book

This book brings together different thoughts and various ideas from different fields to help us understand how financial markets work. The ending of the book gives us hope for the future.

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  • rod
  • 02-07-18

Boring

This guy labors every point and needs to learn to be more succinct. He sounds like your typical self-pleased academic that loves hearing the sound of his own voice. This guy assumes you just just arrived on planet earth yesterday. Although, this is listed as a finance book, he adds nothing new to our understanding of economics.