when applied in a financial context natural selection means that due to the dynamism and complexity of the business environment only a handful of companies can remain in business for long periods of time companies that don t adapt may experience a potentially decreasing market share due to increased or improving competition over a period of time if a company is unable to adapt they may end up in bankruptcy if a trader or investor doesn t adapt to changing market conditions they will lose money and if they fail to adapt over an extended period of time they may be forced out of the market as their capital dwindles to nothing 
natural selection is a dynamic and ongoing process while the ability to adapt to recent changes in the industry may be a good indicator of a company s or trader s overall aptitude it does not guarantee that they will be able to adapt to all future changes in the business environment example of natural selectionduring the credit crisis of 2008 several brokerage firms suffered a similar fate of bankruptcy as a result of this dramatic deterioration in the financial landscape bear stearns founded in 1923 merrill lynch founded in 1914 and lehman brothers founded in 1850 were all unable to retain the independence they had experienced for decades they were all either acquired by larger banks bear stearns by jpmorgan chase 2 and merrill lynch by bank of america 3 or forced into bankruptcy lehman brothers 4 the bottom linebefore the financial collapse of 2008 the collective assumption was that certain institutions were too big to fail unfortunately the events of 2008 proved that when it comes to natural selection size doesn t always matter much more important is flexibility and the ability for a business or an investor to swiftly recognize and adapt to changing business environments 