Remembering AAII's Derek Hageman

This past weekend, we lost Derek Hageman to illness.

Many of you got to know Derek through his work as the editor of AAII Dividend Investing (DI) or his many articles in the AAII Journal. You may have seen him present or participate in an AAII webinar. Some of you were fortunate enough to have met Derek in person at the 2019 AAII conference.

To those of us at AAII, Derek was both a colleague and a friend. He was a pleasure to work and converse with. Derek consistently found the right mix of professionalism, hard work, creativity, collegiality and humor.

This was evident from the start. In his first DI weekly commentary, Derek coined a phrase that was associated with him from that day forward: “Wishing you green arrows.” The phrase is a reference to the upward-pointing arrows we show on the Dividend Investing website for a stock that has increased its dividend. We now also use the upward pointing arrows for stocks, mutual funds and exchange-traded funds (ETFs) whose A+ Investor Grades have improved. Nevertheless, it will be impossible for any of us to say “green arrows” without thinking of Derek.

As an investor, he was a card-carrying member of the value investing club. Here’s how Derek introduced himself to DI subscribers: “While I enjoyed Bill Browder’s high finance thriller ‘Red Notice’ and would love to replicate Kurt Vonnegut’s infallible system for stock investing in the book ‘The Sirens of Titan,’ the set of beliefs and principles that guide my investment decision-making process would be described as value or contrarian investing. I look for investments that I believe to be undervalued and/or out of favor. To be concise, I believe in Warren Buffett’s dictum on investing that it is wise ‘to be fearful when others are greedy and greedy when others are fearful.’”

Derek also popularized the term “three pillars of dividend investing.” (“Three pillars” is a reference to the logo used for DI.) Those pillars are a firm’s growth trends, financial strength/quality and valuation. Growth trends include rising cash flow from operations and dividends as well as good profitability. Quality means reasonable to low levels of debt leverage ratios and sustainable dividends. Valuation centers on a stock’s relative dividend yield.

Beyond AAII Dividend Investing, Derek was involved in the oversight of all AAII model portfolios, contributed to project development and enhancements, managed our research staff and wrote regularly for the AAII Journal among other tasks. He brought fresh, exciting ideas to our First Cut Stocks screening articles. Those included “Karate Chop: Recent Stock Splits” (June 2021) and “Sweet and Savory Halloween Treats” (October 2021).

Beyond what you saw in his writings and presentations, Derek was a former Peace Corps volunteer. He also had great taste in music, enjoyed traveling and loved getting outdoors. He never stopped being a Minnesota Twins and Vikings fan even when, much to his chagrin, both teams disappointed him. Derek was also an Ironman finisher—an event consisting of a 2.4-mile swim followed by a 112-mile bike ride and a 26.2 mile run.

I was fortunate to share an endurance event with him. I mention it because I experienced firsthand how the old adage of actions speaking louder than words exemplified Derek.

In February 2020, Derek joined me to do the Hustle Chicago stair climb. This is an annual fundraiser for the Respiratory Health Association that involves taking the stairs up all 94 floors of the formerly named John Hancock tower. I climbed the 94 floors in 18 minutes, 27 seconds. Derek did it in 17 minutes, 22 seconds.

After we made it to the top floor, I momentarily passed out. The emergency staff at the event sent me to the hospital out of precaution. (Everything turned out to be fine, fortunately. It was mostly a combination of dehydration and a lack of carbohydrates.) Derek accompanied me and another friend of mine who also did the climb, James, to the hospital. James and his wife knew my wife, but Derek had only met her once. Nonetheless, Derek stayed in the emergency room with James and me until my wife could arrive. It was a gesture of kindness that I’ll never forget. It spoke volumes about who Derek was as a person.

On behalf of everyone at AAII, we’ll miss you, Derek. May your memory be a blessing.

Those wishing to make a donation in honor of Derek can do so at the Pancreatic Cancer Action Network website.