Money Talks is a daily business column from CBC radio.
By Duncan Stewart, president of Duncan Stewart Consulting in Toronto
(Listen to the original audio of this column.)

It was JFK who said that “a rising tide lifts all boats.” Is the opposite true - will a global recession of historical depth negatively affect all companies with no exceptions?

Bay Street, Wall Street and retail investors are asking this question after seeing earning reports from tech titans that make it appear that at least some companies may have been able to “dodge a bullet.”

In the past two weeks former tech stalwarts like Microsoft and Intel have reported deeply disappointing numbers - failing to even meet expectations that had already been sharply lowered. On the other hand, Google, Apple and IBM all reported numbers that beat expectations, even if only by a little bit.

Investors are wondering if they should stock up on these companies that seem to have the recessionary equivalent of Harry Potter’s invisibility cloak.

Not so fast - one of my favourite sayings is Mark Twain’s “history may not repeat itself - but it does rhyme.”

In May of 2000 the tech bubble was well on its way to bursting. By the summer, almost every tech company was seeing its revenues, profits and share price get clobbered. But a handful of companies seemed to be immune. Articles were written about them as “safe havens” and investors flocked to them and drove their share prices even higher while the rest of the market crumbled at their feet.

That immunity turned out to be short-lived - their revenues and share prices turned out to be vulnerable too. For various reasons, the businesses that Nortel, JDS Uniphase and Ballard Power were in all lagged the overall tech market. And being the last to fall didn’t help their shareholders - in fact those companies fell more than the overall market and took longer to recover.

I am not suggesting that similar fates await all of Google, Apple and IBM. But I respectfully note that any company whose revenues represent an appreciable fraction of world GDP is enormously likely to “share the pain” that the rest of their sector is going through.

Not to say that their share prices are unreasonable … but I do think that the odds are very high that any or all of the three could report a disappointing quarter or two.

Shareholders should be braced for that possibility.