  Active management is a term that has many meanings and we have found the
defining characteristics needed for success as an "active manager" elusive
within the literature. In this paper we offer a set of criteria that defines an
active manager and his success. In order to facilitate this, we introduce
several definitions, which lead to a logically coherent evaluation framework.
We expand on the definitions of these six key concepts: Introduce a specific
concept of Ruin, Assets, Risk, Discount rate, Margin of safety, and
Optimization.
  Through these definitions a strong defense of active management emerges.
Furthermore, to the extent one chooses to limit the definitions we offer, our
framework reduces to that of Modern Portfolio Theory. Overall, we have aimed to
construct a robust expansion of a framework for active management, one that has
been found wanting in the current literature.
