Two black swans swim in the waters of The Friars Priory, Aylesford, Kent.
Two black swans swim in the waters of The Friars Priory, Aylesford, Kent. - 
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Jeremy Hobson: Now to a class of hedge funds that would like to make money by predicting unforeseen events like the earthquake in Japan or the collapse of the housing market here in the U.S.

Marketplace's Jennifer Collins reports it's a growing business.

Jennifer Collins: They're called "black swan funds." Their managers look for things that are unlikely to happen -- you know, like the chance of crossing paths with a black swan.

Investment adviser John Sakowicz says potential payouts are huge, so they bet like a whole different animal.

John Sakowicz: They have that kind of shark-like olfactory sense.

Mick Swartz teaches finance at the University of Southern California. He says they're more risky than a usual hedge fund. Black swan funds bet on things that are outlandish...

Swartz: You know, like price of palladium might double in a year.

...Or world markets might collapse. London investment firm 36 South Capital Advisors saw one its black swans gain more than 200 percent during the financial crisis. Now the firm announced it will start a new fund called.

Chris Whalen, with Institutional Risk Analytics, says save your money.

Chris Whalen: I think the whole concept is suspect.

After all, it usually takes quite a while to collect on the bets that black swan funds make, if at all.

I'm Jennifer Collins for Marketplace.