When pitching investors, you normally don’t want “hedge fund" and “earthquake” in the same sentence. But Bill Miller, already known for quirky investing methods, is starting a hedge fund that will make bets based in part on a computer model designed to predict natural disasters.

Called Seismic Value Partners 1, the hedge fund marks Miller’s first foray in that business after decades managing mutual funds at Legg Mason. He won approval last month from the U.S. Securities and Exchange Commission to open Miller Value Partners, a money management firm that will oversee his hedge funds.

Miller has licensed the model from OpenHazards Group, a Davis, California, company run by engineers, mathematicians, scientists and business people. While many experts are skeptical, the idea is to apply the mathematics of forecasting the probability of seismic activity to the chances of a stock market crash.

“We have used our experience derived from doing physics to take what we hope is a unique approach to modeling financial markets,” said OpenHazards Chief Executive Officer Bill Graves, a physicist who served as the first head of Cisco Systems Inc.

If it works, the model could help Miller dodge the type of cataclysmic loss that he suffered during the recession when he was caught holding too many financial stocks. His Legg Mason Value Trust plunged 55 percent in 2008, tarnishing a reputation earned by beating the Standard & Poor’s 500 Index for 15 consecutive years.

‘Extreme Events’

Like stock market crashes, “earthquakes are extreme events,” said Lisa Rapuano, who helped Miller run the Legg Mason Special Investment Trust during the 1990s. “This has the potential to help Bill avoid big mistakes, which is one of the downsides of his investment style.”

Miller, 66, declined to comment.

Some scholars dismiss the idea of applying an earthquake model to stock-picking.

“I don’t think it has diddly to do with financial markets,” said Joseph McCauley, a physics professor at the University of Houston who has written several related books, including “Dynamics of Markets: Econophysics and Finance,” published by Cambridge University Press in 2004. “I’m surprised somebody is still messing with that stuff.”