Interview with Randall Lane

I've got a special treat for you today, guys. Randall Lane, author of The Zeroes: My Misadventures in the Decade Wall Street Went Insane and former Editor-In-Chief of Trader Monthly and Dealmaker Magazines, sat down to answer a few of my questions about his book, Trader Monthly, and the good old days of models and bottles.

Randall is now editor-at-large of Newsweek and The Daily Beast, and one of the most striking things about him (both in his book and in dealing with him personally) is his willingness to admit the mistakes he made and take responsibility for his part in the downfall of Doubledown Media. You just don't see that a lot these days, and it's refreshing when you do.

His book was one of the best I read all year in 2010, and pretty much kept me in stitches from beginning to end. What Michael Lewis did for the 80's in Liar's Poker, Randall did for the past decade in The Zeroes, and the book is a worthy successor.

Here's the interview:

Braverman: How did working on the Forbes 400 list early in your career affect the way you viewed wealth?

Lane: Well, obviously, there was a skew. I was a 23-year-old making 27 grand, arguing with billionaires about whether they’re worth $2 billion, or $2.5 billion. It was so disproportional to where I was, though, that it was pretty abstract. Kind of like skydiving, where you’re so high above the ground, it’s not even scary. On another level, by dissecting American wealthy, it opened my eyes to how great fortunes have been traditionally made in America. By building things over time. We lost that to a large degree during the get-rich-quick Zeroes.

Braverman: How did you get the idea for Trader Monthly?

Lane: It was really the brainchild of my partner Magnus Greaves, who ran large prop trading shop out London. I was a media consultant, and he wanted to start a cool, general interest magazine. I was skeptical. As we worked through it, he also mentioned wanting to do a spin-off for traders. It was 2003, and that was a hot idea, which got better the more I learned about that market. So we threw in together.

Braverman: What was the toughest part of starting the magazine? When did you know Trader Monthly was a hit?

Lane: We had the requisite drama any start-up has, but my team had started magazines together before, so the beginning was pretty smooth. It helped that Trader Monthly hit pretty big out of the gate. No one had ever seen anything like it. We hired the Elite modeling agency to handout copies on trading floors, and they got mobbed. Almost 1,000 people showed at our launch parties in Chicago and New York. CNBC did a couple stories on the phenomenon. And off we went.

Braverman: The book is full of great stories of outlandish excess. Care to share any sordid tales of models and bottles that might not have made it into the book?

Lane: Didn’t hold out. The good stuff is in there. Cut out a scene describing a six-concert music series in the Hamptons -- where people paid $3,000 a ticket – that’s $18,000 per person for all the shows – to lie on deck chairs, eating gourmet food, while Billy Joel or Prince play. In comparison to the stuff in the book, that was way too mild.

Braverman: Your book doesn't hesitate to name and shame, and obviously that pisses a lot of people off. I know the penny stock company that Dykstra was mixed up with sued you for $100 million after the book came out. What has some of the other fallout been, and if you had it to do over, would you have given some of these guys a pass?

Lane: I made a promise to myself when I agreed to do this that I’d tell the full truth about what I saw, unvarnished. It was all or nothing – can’t really pick-and-choose, and that started with being critical about myself. I think that raw authenticity explains a lot of the great reviews, and perhaps a few of the upset types. Even most of the people who seemingly come off as louts told me they liked it. The artist Peter Max, who looks like quite a huckster in his pursuit of hedge fund riches, was the subject of the excerpt that ran in Vanity Fair. He called me after to say he kind of liked it. It’s hard to criticize the truth.

Meanwhile, the penny stock lawsuit has already been dismissed – with prejudice! We didn’t even have to file a response to it. They never challenged our reporting. It was utterly without merit. But such is life when you venture into Lenny Dykstra’s tangled, dysfunctional web.

Braverman: What's your favorite memory of Trader Monthly and/or Doubledown Media? Biggest regret?

Lane: Favorite memory: launching it and realizing we were riding a rocket. Regret? The way it ended, leaving bills unpaid and staff without jobs as we struggled desperately to buy time for a sale as the economy melted down around us. The intention was good. The execution certainly wasn’t.

Braverman: You're editor-at-large of Newsweek and The Daily Beast these days. How is it different to be writing and publishing for such a large and diverse readership (versus the narrow focus of TM and Dealmaker)?

Lane: Well, did a lot of writing for big, broad places before Trader Monthly and Dealmaker. But now it’s fun to take what I know about the financial community and distill it for the world.

Braverman: If you had to start over today and publish a magazine directed at today's post-crisis Wall Street, how would it be different?

Lane: Wouldn’t work now. The entire idea was to present these guys as the rock stars they always thought they were. That’s so off message now. And even the magazines that focus on strategy have pretty much folded. Economics aren’t there. But during the last decade, it was a wild ride.