A couple months back, I penned a short piece here on the subject of European investing. The basic premise was this: Ever since the Internet bubble burst in a pop felt 'round the world, European stock ownership has been skidding. Today, only 10% of households own shares in mutual funds; only 14% own shares in individual stocks. In a word, Europeans seem to be afraid of the stock market.

And as the Fool's investor-psychologist emeritus, Bill Mann, wrote in his classic article Buy 'Em When Everyone Else Hates 'Em, "The best time in the world to buy a great company is when everyone else is afraid of it, or hates it."

Well, guess what, Fools? While Europeans in general may be avoiding the stock market, the British are actively dumping their shares. According to last Thursday's Wall Street Journal, regulators in the United Kingdom recently enacted a bunch of regulations aimed at shoring up the balance sheets of U.K. life insurers and pension funds. The new rules require these firms to recalculate the market value of their assets and liabilities every year. And as Fools know well, the market value of stocks in public companies can vary widely over such short time spans.

Tired of reflecting wide swings in the values of their assets year after year, the U.K. life insurers and pension funds have become net sellers of U.K. stocks and net buyers of U.K. bonds. It's not so much that they consider bonds to be safer investments than stocks; it's just that they know bond values are more predictable and less volatile. But the result is the same either way: the decreased demand for U.K. stocks hindered the FTSE's ability to share in the stock market rebounds experienced in the U.S. and elsewhere over the past couple years. And that has kept the price of U.K. shares relatively low.

The Journal speculated that as British stocks become cheap relative to U.S. stocks, British companies could become more and more attractive acquisition targets for U.S. companies. Indeed, we recently sawGeneral Dynamics (NYSE:GD) make a bid for Britain's Alvis (only to be beat out by a rival bid from BAE Systems (AMEX:BAE).) A little earlier this year, fellow Fool Dave Marino-Nachison reported on Whole Foods' (NASDAQ:WFMI) move to buy out Britain's Fresh & Wild. And late last year, Dave also wrote up the story of Wal-Mart's (NYSE:WMT) failed bid for London's Safeway PLC.

To this Fool, it looks like the beginning of a trend that could turn the Old Country into a new prospecting ground for value investors.

Did you know that The Motley Fool has a British cousin? Drop by http://www.fool.co.uk/ and give the lads a holler.

Fool contributor Rich Smith owns no shares in any of the companies mentioned in this article.