Trying to catch the falling knife in resources and energy stocks has become somewhat of a national sport in recent times. Short, sharp rallies in stocks such as Santos and BHP have lured in even the most seasoned investors to sift through the rubble in search of a bargain. Karl Siegling, Portfolio Manager at Cadence Capital, says as a general rule of thumb markets will overshoot your expectations of where they are headed. He highlights the falls in the AUD, the price of oil and the price of iron ore as examples. For Siegling they are not merely observations, he has held short positions in majors such as RIO, BHP and Fortescue for over 12 months and maintains a bearish view on the sector. In this video he explains why he sees further declines in key commodities. He also highlights why trading in debt markets is effectively indicating the equity in Fortescue is worthless.