Have you ever been star-struck? Then you know the kinds of passion a favorite performer can stir up. Mix those passions with investing, and the results can be disastrous.

Fans of 1980s Polka King Jan Lewan flocked to his concerts. They bought his merchandise. They traveled with him around the world on the tours he organized. And when Lewan wanted to raise some money, his fans eagerly bought $5 million in promissory notes that turned out to be bogus.

Lewan's story is told on the latest episode of CNBC's "American Greed." It is also the subject of a new Netflix movie starring Jack Black. The film is a comedy, but victims — who lost nearly everything — find nothing about the story funny.

Donna Klimecki's father lost $30,000.

"It's not a comedy. It's a tragedy," she told "American Greed." "It's just very sad."

Investing in show business is practically as old as show business itself, and because of the emotions involved, even the most legitimately structured vehicles can be treacherous.

Among the prime examples are so-called Bowie Bonds, which were tied to future royalties from the music of the late rock icon David Bowie. The pioneering vehicles, sold in 1997, allowed Bowie to raise $55 million from his music without having to sell the rights. But by 2004, file-sharing services eroded the value of recorded music. Though the bonds were completely legitimate, consistently paying their 7.9 percent coupon and never defaulting, they lost value, were eventually downgraded to one notch above junk status, and the market for similar offerings soured.

Risky business

Investment banker David Pullman, who developed the Bowie Bonds and has since brokered deals involving the music of James Brown, The Isley Brothers and others, said in an interview that the securities have never been geared toward individual investors, but rather "for institutional investors that are the most sophisticated, largest investors in the world buying bonds that are backed by future royalties."

He said that purchasers of the bonds, which include conservative investors like insurance companies, find the products attractive because their performance does not correlate to other asset classes like stocks. That allows the investors to diversify their holdings. And he said sophisticated royalty investors know better than to let emotions cloud their analysis.

"We slice and dice them and look at the history of them as to how they will perform," he said. "We look at the history of numbers. We verify the income streams. The longer the history and the more stable it is, the more it will be a well-performing asset going forward."

Pullman says that is one reason his firm never invests in new artists. He advises individuals who are considering getting into the game to exercise similar caution.

"I would be wary as an investor looking at something that's new," he said. "That's fine if you want to be an equity investor in these deals and take a risk, and you're a fan and you want to support the artists in terms of maybe a crowdfunding or another type of income-raising idea – Kickstarter – or other streams. But the younger it is, the riskier it is."

Proceed with caution

One way to invest in your favorite performer without some of the risk is to put your money into his or her record label. Those companies, after all, make their living by betting successfully on up-and-coming artists, and are built for risk.

Unfortunately, there are few record labels left, and fewer still that are publicly traded. Sony Music, whose stable of artists ranges from Elvis Presley to DJ Khaled, is a unit of Sony Corp. The parent company's stock is up more than 50 percent in the past year. Universal Music Group, home to Katy Perry, Lady Gaga, Nick Jonas and Frank Sinatra, is a subsidiary of French conglomerate Vivendi. The stock is well off of its highs set in January, but still up more than 20 percent from one year ago. Of course, music is just a part of both companies' businesses, making their stocks hardly a pure play.

Or you could consider investing in companies that sell the music. Apple, Amazon.com and Google parent Alphabet all have streaming services, though they are small parts of much larger businesses. The only pure music streaming company that is publicly traded is Pandora, but its stock is down more than 50 percent from a year ago. Rival Spotify has announced it will go public April 3, when it lists its shares on the New York Stock Exchange for the first time. The plans have already been clouded by concerns about the complex and ever-changing nature of the music royalty business. It is a story Pullman knows all too well.

"Quick decisions are difficult in this business because you need to be doing a detailed analysis of not just what the total number of the income is but where it's coming from, what songs, how it does domestically, how it does foreign, what's the staying power," he said.

Hey there, you with the stars in your eyes

Most important, Pullman says, is to avoid being swayed by the artist's charisma, which tends to be fleeting and thus a poor investment. Instead, focus on the content the artist is producing.

"It's always about the song. A great song is a great song. These songs get covered time and time again. They get sampled. Those are the type of songs they're looking for and income streams and artists, not ones that are just because the artist is hot or popular," he said.

That kind of dispassionate analysis would have come in handy for the hundreds of investors who bet their money on Polka King Lewan, who served a five-year federal prison sentence after pleading guilty in late 2003 to two counts of fraud.

Now living in Florida, he has resumed his music career and, according to court filings, has begun paying his court-ordered $4.9 million in restitution. But Lewan has not exactly zoomed to the top of the charts. He says he is paying only a few hundred dollars a month to his victims, who will no doubt never hear a polka the same way again.

See how Polka King Jan Lewan charmed his biggest fans out of millions of dollars. Watch an all-new episode of "American Greed," Monday, March 19, at 10 p.m. ET/PT only on CNBC.

Correction: Bowie bonds were eventually downgraded to one notch above junk status. An earlier version misstated their rating.