Berkshire Hathaway (BRK.A 0.58%) (BRK.B 0.38%) owns a massive stock portfolio with about 50 different investments and a total market value of more than $308 billion. And many of the stocks were hand-picked by Warren Buffett himself.

In the current bear market, some of Berkshire's stocks look like amazing bargains for patient long-term investors. But that's not the case for all of them. Here are two Buffett stocks in particular that could be worth a closer look right now, and one that has limited upside potential and is best to avoid.

The financial sector is dirt cheap right now

Many financial sector stocks have been beaten down lately, and it's easy to understand why. We're already seeing a slowdown in discretionary spending, which could hurt loan demand, and if the economy falls into a recession, it could result in a significant uptick in defaults.

Bank of America (BAC 1.35%), which is Berkshire's second-largest stock position, is about 40% below its high and trades at a slight discount to book value. And while the concerns surrounding loan demand and a rise in defaults are certainly valid, Bank of America stands to gain quite a bit from the current environment as well, specifically because of interest rates. We've already started to see Bank of America's net interest margin rise a bit, and with inflation running hotter than expected in recent months, interest rates could continue to rise.

Bank of America has one of the lowest-cost deposit bases in the business, with an average interest rate of just 0.02% on its consumer deposits at the end of the second quarter. In fact, Bank of America estimates that a 100-basis-point (one percentage point) rise in interest rates would result in an additional $5 billion in net interest income annually.

A good time to bet on America?

Buffett has said the best investment most people can make is a simple, low-cost S&P 500 index fund like the Vanguard S&P 500 ETF (VOO 0.68%). And while it isn't a big investment for Berkshire, you'll certainly find shares of this fund in the portfolio.

Buffett looks at the S&P 500 as a bet on American business as a whole, and historically it has been a pretty good bet. In fact, from 1965 through 2021, the S&P 500 produced 10.5% annualized total returns for investors. To put this into perspective, a $10,000 investment at this rate of return could grow to nearly $200,000 after 30 years.

It's a scary market environment right now, and it can seem intimidating to try to choose individual stocks. With the S&P 500 more than 26% below its 52-week high, now could be a smart time to simply bet on America and let its long-term compounding power work for you.

Berkshire's favorite REIT isn't the same opportunity it was

I've been a fan of STORE Capital (STOR) for some time, and in full disclosure, it's one of the largest stock positions in my portfolio. But the investment thesis changed dramatically recently, when the company agreed to sell itself to private investors for $32.25 per share.

As of this writing, STORE's stock trades for less than 3% below that price, and future dividends are suspended. In short, there's very little upside potential from here, and little reason to buy new shares right now. To be fair, there is a provision in the deal that allows the company to try to find a higher bidder, but it will have expired by the time you read this.

If you already own shares of STORE Capital or were thinking of buying it, and want a similar real estate investment trust (REIT) investment, Realty Income (O -0.25%) is the leading net-lease REIT and is down by more than 25% from recent highs, yielding 5.3% annually through monthly dividend payments. In fact, I've made the case before that Realty Income is a stock Buffett should buy.

It's raining gold

As Warren Buffett has said, "Opportunities come infrequently. When it's raining gold, put out the bucket, not the thimble." While it's certainly a turbulent market environment and there's no way to know the direction of the market or any individual stocks in the coming weeks or months, it certainly appears to be raining gold for patient long-term investors. I highlighted my two favorite Buffett stocks here, but there are excellent opportunities in every sector of the market right now and it's a great time to have decades to let your investments grow.