Hard to believe, but many buyers seem lovesick when it comes to the object of their affections. They don't just like the target company they are pursuing, they fall madly in love with it. And that means they have to have it! It seems like it shouldn't be necessary to remind buyers not to let their emotions cloud their judgement. But it definitely is necessary.

What other possible reason could there be for Time Warner to pay $100B+ for AOL? That might be the best case of emotional sentiment ruling calm reason. Eventually, Time Warner was forced to take a $54B write down on its AOL acquisition. The same story, on a smaller scale, is repeated over and over again. If you are a buyer, don't fall in love with your target company. That love comes at a very high price. Be prudent, stick to your predetermined valuation range, and avoid the intense buyers remorse that follows a rash, emotional decision.