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While some investors capitalize on buying stocks when their prices drop, it may not always be a foolproof strategy. Wall Street expert Kenny Polcari cautioned that purchasing the dip may not be wise as stock prices can decrease due to being overvalued or fundamentally flawed.

Polcari used Enron and Lehman Brothers as cautionary tales, illustrating how these once-popular stocks faced significant declines and ultimately bankruptcy. He emphasized the importance of critically assessing factors like earnings, revenue growth, debt levels, and market conditions before making investment decisions.

Investors are advised to conduct thorough research into companies to determine if buying at a lower price is a calculated move or if the stock was initially overvalued. It is crucial to differentiate between the price of a stock and its actual value, and to exercise patience and discipline rather than making emotional decisions in response to market fluctuations.