Homma Munehisa

Munehisa Homma was born in 1724 in the city of Sakata , which was a major port and one of the centers of the rice trade. The Homm family owned vast rice plantations and was also involved in the rice trade.

In 1750, after the death of his father, Munehis, as the youngest son, began to manage family capital (which happened contrary to tradition, according to which the eldest son became the heir to his father’s business, and could testify to his remarkable commercial abilities). At this time, a rice exchange also appeared in Sakat. Homma traded on it for several years, and then transferred his activities to Osaka and to Edo , where he made a huge fortune.

The effectiveness of Homma was such that in one of the periods he concluded 100 successful deals in a row. Later, when the exchange trade in rice was officially authorized by the government, he was invited to work as a financial adviser and was granted the title of samurai .

In medieval Japan, rice was not only the main food crop and raw material for many products and goods, but also the basis of the welfare of society - they, in the conditions of the inevitable depreciation of money, collected and paid a salary, it was used in a number of rituals, etc.

The largest rice exchange in Japan ( Dojima ) was located in Osaka, during its heyday more than 1300 merchants worked at it. Prices on the Osaka Stock Exchange affected rice prices across the country.

Until approximately 1710, only physical trading in rice was carried out on the exchange. Later on, the practice of trading the so-called “rice coupons” (in modern terminology - futures on rice) arose. Each coupon was a receipt for the supply of rice of the future crop, sometimes several years in advance. Such receipts were issued by large feudal lords who needed cash. The coupon could pass from hand to hand, and its price changed depending on market expectations (both supported by objective factors - weather, volumes of stocks, future harvest, and speculative ).

This type of activity quickly became popular: it is known that in 1749 the number of “empty rice coupons” (that is, those whose owners did not have real rice) was several times higher than all the stocks in the country.

Without a doubt, Homma took advantage of access to insider information (thanks to his enormous wealth and influence, any news about the state and market situation was available to him). In addition, for many years he regularly monitored the weather. However, his most important achievement should be considered the desire to understand the "psychology of the market." For 15 years, he studied rice prices in the entire history of trading in order to identify patterns of behavior of players on the exchange, and found that the psychological aspect is critical to successful operations in the financial market , and the emotions of traders have a decisive influence on rice prices. Homma also described the “ bull market ” and the “ bear market ”, the differences between them and some frequently occurring price movements (in the process of studying them, they came up with a method of displaying 4 prices at once instead of one: minimum, maximum, opening and closing).

He is attributed to the authorship of a book published in 1755 entitled “The Goldmine - A Tale of Three Monkeys about Money” ( 三 猿 金泉 秘録 san en kinsen hiroku ) - the first manuals on market psychology and technical analysis. In this book, Homma described many methods of analysis that are used in our time, and deduced the main rule of price dynamics: “A market that has risen must finally fall, and a market that has fallen will eventually rise” (alternating yin and yang )

It is curious that Homma, being the largest stock exchange trader in Osaka, remained at home. There is information that he created his own communication line in order to receive information about the price difference in real time: signalmen were on duty all the way between Osaka and Sakata (600 km) (on the roofs of buildings, hilltops and mountains), who flags relayed information about the auction and orders for transactions.

At the same time, if the operability of such a “telegraph” is not in doubt, such manipulations, especially on an ongoing basis, could hardly have been carried out secretly from the authorities (their disclosure would have led to sad consequences for Homma, who was not a person of noble origin).

The dates of Homma's life, as well as the fact of its existence, remain controversial. However, he is widely known in Japan, and his activities are reflected in folklore.

In Japan, there was a proverb testifying to his wealth: "I will never become Homma, it’s enough for me that I’m the prince of the sun . "

One of the songs has the following words: “When in Sakata (the homeland of Homma) it is sunny (good rice harvest), in Doujima (the Osaka exchange) it is cloudy (prices fall), and in Kuramay (the exchange in Edo) it rains (prices fall off) ".

Currently, the Homm family house in Sakat houses an art museum.

• Technical analysis

• Who invented the Japanese candles // Become Richer Magazine, 2010
• Honma Munehisa in the Three Monkeys Dictionary