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Perhaps those asserting the contrary case would care to explain why, if he did not believe the Hobbit to have the Ring, Sauron would become so obsessed with the Hobbit
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Because he knows that
the Hobbit (with the Ring) was travelling with three
other Hobbits who probably have a good idea of where their friend is at (with said Ring).
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why he awaited the Hobbit with such expectation
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To extract certain information (see above) and, well, he enjoys tormenting innocents.
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and what exactly the error was that Gandalf was referring to.
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That Sauron thought Pippin was, and I quote "captive" in Isengard and not riding free with Gandalf with Isengard in smoking ruins behind them.