Institutional Investor hall of famer Rich Bernstein is a market bull whose playbook excludes some of Wall Street’s most popular groups.

He blames a risky see-saw dynamic playing out in the marketplace.

“On one side, we have all that I would call the bubble assets: tech, innovation disruption, cryptocurrencies,” the Richard Bernstein Advisors CEO and CIO told CNBC’s “Trading Nation” on Friday. “On the other side of this see-saw, you have literally everything else in the world. I think if you’re looking at 2022 into 2023, you want to be in the everything else in the world side of that see-saw.”

Bernstein believes a scarcity of capital will spell opportunities.

“That’s where your returns are higher,” he said.

His number one pick is energy, a group he listed as a top play coming into 2021. Earlier this year, Bernstein called oil the most ignored bull market. And now, he believes it could be the growth group of 2022.

The Energy Select Sector SPDR Fund, which tracks the group, is already up 51% so far this year.

In a special note to CNBC, Bernstein wrote “The last time the FCF [free cash flow] yield for the energy sector was this high relative to either the market or the Tech sector was around the Tech Bubble, and energy outperformed for a decade. The sector’s dividend yield is >3X the S&P 500’s dividend yield.”

Bernstein, who ran strategy at Merrill Lynch, warns today’s “bubble assets” could dramatically hurt investors just like the early 2000s.

“Valuations are very high and what you have to remember is the valuation is more important than the story,” he said.

He acknowledges stories told about the internet and cellular communications during the 2000 tech bubble became a reality over the next decade. But it took years to collect the profits.

“If you invested in the Nasdaq 100, which were the real companies at the time, it took you 14 years to break even,” said Bernstein. “Something tells me that the people today are not paying attention to valuations, but also aren’t thinking it’s going to take them 14 years to break even.”

Crypto as a ‘monster’ bubble

Bernstein also sees cryptocurrency as a major problem. Last June on “Trading Nation,” he warned the rush to own bitcoin and other cryptocurrencies was becoming dangerously parabolic.

“Cryptos are the biggest financial bubble ever in history,” said Bernstein. “This is just a monster one.”

As of Friday’s market close, bitcoin is off about 30% over the past month. It’s still up 63% so far this year.

Bernstein speculates bitcoin could fall as much as 90% just like some tech stocks during the 2000 bubble.

“I think one wants to wait to look at the true fundamentals, and look at the valuations before deciding that this is all over,” Bernstein said.

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