With the euro in a freefall, conventional wisdom holds that now is the time to abandon European stocks. That's probably not bad advice. Austerity measures to meet enormous debt obligations in countries such as Greece, Portugal, Italy, and Spain have the potential to paralyze Europe's economies for years to come.

These fears have sparked a sell-off in European stocks over the past few months, with the sharpest declines reserved for those considered closest to the crisis. Greece's National Bank of Greece (NYSE: NBG) and Hellenic Telecommunications (NYSE: OTE), for example, are down 30% and 25%, respectively, over the past three months and Spain's Banco Santander (NYSE: STD) is down 20%.

Savvy investors, however, should be looking for opportunity in this carnage. In times like these, you might just make your best investment ever.

But don't take my word for it
Two things I read this past week prompted me to make that last observation. The first was a 2005 interview that Fool co-founder Tom Gardner did with NYU finance professor and valuation guru Aswath Damodaran. Tom asked the good professor to describe his "best investment ever." Here's what Damodaran said:

My best investment ever was Embraer, the Brazilian aerospace company that I bought after the election in 2002...The reason I picked Embraer is that Embraer gets 97% of its revenues in Western Europe and North America. They are about as Brazilian as Boeing is in terms of what they do. But in that year, because people were concerned about Brazil, Embraer got knocked down to six times earnings, five and a half times earnings, because it was viewed as a Brazilian company. I just thought it was completely unfair.

Damodaran went on to buy stock in the company, Embraer kept on selling planes to Europe and North America, and the stock tripled between the end of 2002 and the end of 2005.

Rinse, repeat
The second reading that got me here was a collection of notes from Seth Klarman's speech at the annual CFA conference. Here's what he had to say:

We have a non-conventional approach to organizing our analysts ... They don't waste their time keeping up on the latest quarterly earnings from companies we will never invest in, but spend their time looking for irrational sellers.

Just who are "irrational sellers"? Well, they're the type of people who will sell anything associated with Brazil just because a left-of-center president was elected, without looking at the reality of the situation. They're also potentially the type of people who will sell anything associated with Europe, just because the continent's currency is dropping.

The magic formula
The success of both of these approaches lies in exploiting material differences between market perception and market reality. With regards to Embraer, it was irrational to sell the stock in order to reduce exposure to Brazil. Even though the company is headquartered in the country, it has few connections to Brazil's economy, since its sales come from elsewhere.

Now consider that lesson in the context of the three European companies mentioned above. While Hellenic Telecommunications gets more than 70% of its revenue from Greece, and should rightfully be tied to that troubled economy, both NBG and Santander have a significant international presence. NBG has operations in the fast-growing Turkish market. Santander maintains a $25 billion business in Latin America. Now, this doesn't mean these banks won't have any problems going forward -- both hold significant amounts of European debt on their balance sheets. But if their stocks keep selling off on the thesis that Europe is bad, savvy investors may be able to profit.

Several other European companies aren't actually all that European. Here's a list of a few intriguing prospects to keep an eye on going forward:

Company

Headquarters

Percentage of European Revenue

Philip Morris International (NYSE: PM)

Switzerland

46%

Nestle

Switzerland

24%

Tenaris (NYSE: TS)

Luxembourg

11%

Syngenta (NYSE: SYT)

Switzerland

33%

ABB (NYSE: ABB)

Switzerland

41%

Source: Capital IQ, a division of Standard & Poor's.

Not all of these companies are in screaming bargain territory just yet, but all five are attractive businesses with stocks that have been declining alongside the euro. So put these on your watch list and be prepared to take advantage -- and don't worry if it's a completely unfair opportunity -- should that trend continue. They're not actually all that European, and one may just turn out to be your best investment ever.

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Tim Hanson is co-advisor of Motley Fool Global Gains. He owns shares of National Bank of Greece, ABB, and Philip Morris International. Philip Morris International, ABB, and Syngenta are each Motley Fool Global Gains recommendations. The Fool's disclosure policy is definitely not Euro.