What happened

Argentina's stock market went up in flames yesterday, with individual financial stocks falling as much as 55% and utilities and industrials down 40% or more.

Argentine stock markets as a whole plunged "more than 30%," according to CNBC, and Reuters opined that this was "the second-biggest one day slump anywhere since 1950" (emphasis added).

Today, the reverse is true -- at least to a small extent. After losing more than half its value yesterday, natural gas utility Transportadora de Gas del Sur (NYSE:TGS) bounced back as much as 9.6% in early Tuesday trading, and remains up 7% as of 12:35 p.m. EDT. Cement maker Loma Negra (NYSE:LOMA) fell a staggering 57% Monday, but climbed back as much as 15% this morning (and is still up 5.5%). And banker Grupo Supervielle (NYSE:SUPV), which played touch-and-go with a 60% loss yesterday, booked a 17.5% gain this morning.

Despite giving much of that back, Supervielle is still up 7.4% as of this writing.

Flames against a black background

Image source: Getty Images.

So what

Do you think this is good news for opportunistic investors? Not so fast.

Even after their bounces back, Loma Negra and Transportadora de Gas have each lost 44% of their value since the close of trading last week, while Supervielle remains down 56%. In each case, the size of the bounce pales in comparison to the devastation of the losses incurred on Monday, and it's going to take a long time to make that money back.

Why? As an exercise in pure mathematics, after a stock falls 50% (say, from $10 to $5), it must double -- that is, book a 100% gain from $5 to $10 -- just to get "back to even."

Now what

So what are the chances that future news out of Argentina will be good enough to make these stocks double, and restore to investors the losses they incurred yesterday -- let alone earn a profit?

Well, in Sunday's primary, Argentine voters picked the candidates they want to run in a presidential election in October. Reform candidate and incumbent president Mauricio Macri won just 32% of the votes, while Peronist (read socialist, anti-capitalist) candidate Alberto Fernandez and his running mate Cristina Kirchner (the former president who put Argentina in its current economic fix in the first place) won 48%.

According to The Wall Street Journal, these tallies make it very likely indeed that Fernandez and Kirchner will win the October election outright in the first round of voting. And if that happens, chances are that all the economic reforms Macri managed to get enacted over the past four years will be rolled back.

Once that happens, I suspect the chances of investors getting back the money they lost on Monday will drop to virtually nil.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.