For shareholders, there is nothing worse than competition, and less of it breeds opportunity. Jim Cramer believes the reduction of competition defined the winners of the tape on Wednesday.
"There is just enough competition among companies to keep their stock in check, but when the competition lessens, companies are instantly rewarded with stocks that rally, making it worthwhile to stick around to see what group will be the next one to soar," the "Mad Money" host said.
The airlines soared for much of 2014 after various mergers left just a few of the big players. Once those mergers took place and route overlaps were eliminated, airlines could finally raise prices.
But in 2015, airlines not only added a lot of planes, but also they tried to take advantage of higher prices by competing with one another. Relentless price cutting and lower earnings per share followed.
"This group has been a house of pain ever since, because no airline would stop adding new capacity lest some other company take advantage of the opportunity," Cramer said.