Should you buy European shares?

TWO MEN are sitting in adjacent restaurant booths. One is talking at length—about train journeys, women, morality, taking chances, living one day at a time. The other is captivated. “When you die, you’re going to regret the things you don’t do,” says the speaker. After more of this, he sighs, pauses and offers his new friend a drink. He then takes out a map. “This is a piece of land,” he says. “Listen to what I’m going to tell you now.”

This is how Richard Roma, the alpha salesman in “Glengarry Glen Ross”, a play by David Mamet, seduces a stranger into buying a tract of undeveloped land. The scene comes to mind when considering the investment case for euro-zone stocks. The phrase “time to buy European equities” can elicit the same sort of alarmed response as an invitation to buy Florida swampland. An oblique sales pitch is generally advisable—even though now might be a better time than usual to make it.

How would a stockbroking Ricky Roma sell the euro-zone story? The main thing would be not to oversell it: Europe is hardly transformed. The meat of it is that things are not as bad as you probably think. The euro-zone’s weaknesses have not gone away, but are much less crippling. It is likely to do quite well in the early stages of economic recovery. That might just be enough to close the deal.

One sure-thing trade...