How can you call this a failed hedge? As you stated in the article, a hedge is a way to attempt to protect the asset againts its own downside risk. One can't "hedge" using a different asset (as in the Apple versus Google example) because you introduce a whole new set of variables and risk you may not even be aware of. This is in part, and example of risk (idiosynchratic and systematic) compounding which is why with such investment decisions, you see billions of dollars lost. Which I always wonder why investors are allowed to make bets based upon the success of other bets in order to cover the losses of other bets?????? When you invest money in a bank and/or its financial products, you at least get FDIC insured and it seems that in the stock market, there should also be a limit to the amount you can leverage or risk in a portfolio.