My father was an accountant – a brilliant one at that. He finished first in Canada on a national matriculation exam and then went on to become the managing partner of a successful accounting firm in Toronto. He would have excelled at what was known in the 1950s as the Big Ten accounting firms, but when my father graduated college Jews weren’t welcomed at their Canadian outposts.

My father “played the markets,” the term once used for people who invested in publicly traded stocks. His smarts gave him a competitive edge, as did his unrivaled ability to read and analyze a balance sheet. Profits on an oil and gas stock funded my college education.

Smarts and a mastery of financials are secondary skills required of investors these days. The public markets have become a manifestation of the so-called “Greater Fool Theory,” meaning that securities are not traded on the basis of their underlying values but rather there’s always a sucker willing to pay more than their inherently worth. Retail investors invariably emerge as the greatest investment fools, which is why Wall Street’s smartest investors dismiss them as “dumb money.”

Nikola Corp., an aspiring electric truck company with imaginary products and virtually no revenues, exemplifies the Greater Fool Theory, although in this instance GM briefly ranked atop of the sucker pile. Nikola for a short time was valued more than Ford Motor Co., but its stock came crashing down after an unknown 36-year-old researcher named Nathan Anderson issued a damning 67-page report arguing that Nikola was an “intricate fraud.”

Anderson’s report came just days after GM announced that it had agreed to accept $2 billion worth of Nikola stock in exchange for supplying Nikola with the company’s battery and fuel cell technology. Dan Ives, a Wedbush analyst whose insights are frequently quoted in the media, crowed about the deal. “There have been many skeptics around Nikola and its founder Trevor Milton’s ambitions over the coming years, which now get thrown out the window with stalwart GM making a major strategic bet on Nikola for the next decade,” Ives said.

Milton, a high school dropout who previously ran a middling security business, appreciated the naivete of retail investors. Nikola was taken public through a ‘wing and a prayer’ investment vehicle known as a special purpose acquisition company (SPAC), or a blank check company. Investors in publicly-traded SPACs pony up capital without knowing how their money will be ultimately spent. Eventually, the SPAC acquires another company and voila! — the target company is now publicly traded. The beauty of going public the SPAC route is that a company escapes the comparatively more rigorous scrutiny than is supposedly conducted for initial public offerings.

“We needed a method to get to the market, to get publicly traded quickly, and that’s really what the SPAC was there for,” Milton said in a March television interview. “This is a retail story.”

Investors trading on Robinhood, a popular trading app for millennials, were among Nikola’s biggest investors. CNBC’s Jim Cramer duly noted their naivete and advised Wall Street professionals how to further profit off the retail chumps. 

CNBC’s Jim Cramer

“Pick a couple of stocks (on Robinhood),” Cramer recently advised professional traders. “You gun them in the morning, and then you hope people are stupid enough and they buy them.” (I’m not a securities attorney, but “gun them in the morning” strikes me as a euphemism for market manipulation, which is illegal.)

Even the mathematically challenged like me can readily understand the many flaws in Nikola’s business model.  As the Wall Street Journal  explained, it’s predicated on the assumption that Nikola can purchase electricity at well below current prices and that the hydrogen stations providing power for the company’s trucks would run at full capacity.  Nikola’s plan assumed it could purchase renewable power for 3.5 cents per kilowatt-hour, when the going rate for industrial customers, on average, is nearly 7 cents for grid power, and commercial customers pay nearly 11 cents.

The model is based on “unproven concepts around renewable energy,” energy analyst Gordon Johnson, told the Journal.

I know diddly-squat about renewable energy pricing. But it would seem neither does Mary Barra, GM’s CEO, Dan Ives of Wedbush, or analysts at Cowen who also trumpeted GM’s initially 11 percent planned stake in Nikola. Ditto for Stephen Girsky, a former GM executive whose SPAC took Nikola public and who replaced Milton as executive chairman after the founder was forced out.

Mary Barra

GM reportedly is rethinking its deal with Nikola, amid allegations from Milton’s cousin and another woman that he sexually abused them. Milton denies any wrongdoing, but last night CNN posted a story questioning Milton’s previous ventures. The Justice Department and other regulators also are reportedly investigating Nikola.

We’ll see how the Nikola story plays out. But a September 11 headline in InvestorPlace makes clear that Nikola’s fundamentals won’t determine the company’s fate.

“Nikola stock is a fraud, but it’s still the next Tesla,” the headline blared. “Investors who can overlook the electric truck maker’s shady past will likely profit.”

There you have it, folks. Buying stocks is akin to playing the slots in Vegas. Nikola’s stock is a giant gamble, and investors are assured of a great floor show from the company and its founder.