[jihoon796]

Agreed. In addition:

"As discussed in the introduction, public information may be profitable if sophisticated investors like hedge funds are skilled information processors. Alternatively, private information may be more valuable when used in conjunction with public information." (pg. 19)

The paper goes on to show evidence suggesting that the predominant channel is the latter complementary private information mechanism.

It does seem counterintuitive that publicly-available information does indeed generate alpha, but the real valuable insight here is that hedge funds are able to generate alpha from using public data synergistically with private data.

[dsacco]

> It does seem counterintuitive that publicly-available information does indeed generate alpha, but the real valuable insight here is that hedge funds are able to generate alpha from using public data synergistically with private data.

Even more than that: the best funds can generate alpha by simply combining different sources of public data without necessarily using any nonpublic data.