Thinking about buying Facebook stock? You may be suffering from a mental disorder. No, really.
If you are thinking about buying Facebook, first make sure you are not suffering from Stockholm syndrome. This paradoxical psychological phenomenon refers to when hostages express empathy and have positive feelings toward their captors.
Wall Street Journal for an article on sudden money titled, "Too Rich, Too Soon." In the interview, I joked that owners and employees of companies will often have a good deal of company stock in their portfolio because they suffer from "Stock"-holm syndrome (Get it?) and don't sell because of a loyalty and affinity to their employer. I fear that many of the 900 plus million users of Facebook who want to become investors are suffering from a similar financial version of Stockholm syndrome. Why?
Psychologists have long known that positive and negative emotions can be transferred from the source of the emotion to an innocuous person. For example, if you repeatedly deliver bad news to your boss -- even if you are not the cause of the bad news -- your boss may start to associate "bad news" and negativity with you. How many times have you cried out, "Don't shoot the messenger!"? It's basic stimulus response: I see you; you tell me bad news; I get angry. Repeat this interaction a few times and suddenly it shifts to: I see you and I get angry.
What does this have to do with the Facebook IPO? You can flip this, and it still works. If you are consistently the source of good news -- again, even if you had nothing to do with it -- you will be associated with positive emotions. This is why salespeople suggest lunch or dinner meetings. They know that eating gets us in a relaxed and positive mood and they are hoping we get into such a good mood that we'll be more likely to buy from them.
Of course, Facebook isn't your captor (written with a smirk), but they do have a powerful emotional grip on your life. Think about it. When you use Facebook, you are connecting with your loved ones -- your closest family and friends. There are massive amounts of positive emotions and good feelings attributed to Facebook with each interaction. Don't you feel a little upbeat boost when you look at Facebook's iconic blue logo?
Wall Street has been buzzing about the Facebook IPO for months, which is no surprise. What is surprising is the level of fervor outside of Wall Street. Everyone is talking about this IPO and nearly everyone wants the stock. Famed mutual fund manager Peter Lynch evangelized individual investors to stick to what they know by buying the stock of companies whose products and services they use and like. With close to 900 million monthly active users and 2.7 billion comments and "likes" a day, Facebook the stock may be in for a wild ride.
Is Facebook a good investment? I don't know. But I do know that investing when you're mentally and emotionally compromised is probably not a good idea.
(Robert Pagliarini is a CBS MoneyWatch columnist and the author of "The Other 8 Hours: Maximize Your Free Time to Create New Wealth & Purpose" and the national best-seller "The Six Day Financial Makeover." Visit YourOther8Hours.com.)