This book has been a work in progress for a very long time. The due date listed in my contract with Princeton University Press is April 15, 2008. Needless to say, something came up that year. We need a new way of thinking about financial markets and human behavior, and that’s what this book is about. I call this new way of thinking the Adaptive Markets Hypothesis. The term "adaptive markets" refers to the multiple roles that evolution plays in shaping human behavior and financial markets, and "hypothesis" is meant to connect and contrast this framework with the Efficient Markets Hypothesis, the theory adopted by the investment industry and most finance academics. Efficient markets mean that there’s no such thing as a free lunch, especially on Wall Street: if financial market prices fully incorporate all relevant information already, trying to beat the market is a hopeless task. Instead, you should all put your money into passive index funds that diversify as broadly as possible, and stay invested in stocks for the long run. Sound familiar? This is the theory that we teach in business schools today, and it was taught to your broker, your financial adviser, and your portfolio manager. In 2013, University of Chicago finance professor Eugene F. Fama was awarded the Nobel Prize in Economic Sciences specifically for this notion of market efficiency.