Once upon a time in 17th century Japanese town of Osaka, there lived a man named Munehisa Homma. He was a rice merchant and had a reasonably sound rice trading business. Rice, in 17th century Japan was the lifeblood of the economy and held the significance of hard currency.
Merchants would arrive at the rice market every day and buy bales of rice from the farmers at the times of harvest. Homma was one such merchant, but he had been working to gain a competitive edge. For 15 years he studied ancient records and developed a method to accurately predict movements in price trends in the rice market. His method involved the use of a symbol that resembled a candlestick with a wick on each end. The candlesticks would vary in height but always be one of two colours and either filled with that colour or hollow.
Homma would soon shoot to fame. It all began when he was able to predict a mid season drought, and bought heavily in the pre-season harvest while all other merchants ridiculed him while sipping tea. It was customary for Japanese rice merchants to wait for the main mid season harvest to flush the market and sweep the rice stocks when prices were low because the heavy supply. They could not understand why Homma was buying knowing full well that all his warehouses were fully stocked (as were theirs) in the pre-season.
Homma quietly but determinedly bought, bought and bought for three full days while fellow merchants advised him, questioned him, and even ridiculed him. They waited comfortably for the prices to drop, as was usual, when the mid season rice harvest would flush the market. They did not know what he had foreseen in his candlestick analyses - a major price hike in the very near future. By next week the news arrived. Late rains had ruined the annual harvest from the north - there would be no abundant crop this year.
Panic struck the market. There was going to be no more rice harvest and almost instantly every merchant wanted to buy. Supply ran short as expected. Save a few surplus bales remaining with pre-season farmers, there was no more rice to buy from the farmers. Rice prices shot up. Soon they turned to Homma and he charged at his leisurely discretion. His method had proved its wisdom.
The Rice King, as Homma came to be called soon after he began implementing his knowledge with renewed confidence went on to be raised to the rank of Samurai.
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