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Gandalf visited the Shire frequently after meeting Aragorn, mainly to see his old companion Bilbo Baggins and his younger nephew Frodo. Observing that Bilbo looked unusually young for his advanced age, he started to worry about the -- magic ring -- that Bilbo had obtained on his expedition. Gandalf remembered the trick Bilbo had pulled when he had first claimed it as his own; afterward, Bilbo had acknowledged that he had stolen it from Gollum. Gandalf noticed that Bilbo had become engrossed with the Ring and had started to question whether it really was a ring of power. His suspicions were piqued by such un-hobbitlike behavior. As a practical prank on his neighbors, Bilbo organized what would come to be remembered as his Farewell Birthday Party in 3001, and at the end of the speech of the hobbit, he put on the enigmatic Ring and vanished. Later, when he was saying goodbye to Gandalf, who had been informed of his departure, Bilbo started to reconsider giving Frodo his Ring, as he had already decided. Gandalf attempted to talk Bilbo out of it, but Bilbo grew irate and said Gandalf was attempting to take the Ring for himself — what he called his — precious. Frightened by the outburst of Bilbo, Gandalf erupted to his maximum height and unleashed his might, terrifying the hobbit. This jolted Bilbo back to reality; he apologized, acknowledged that the Ring had been bothering him recently, and reluctantly gave it up. Before departing the Shire on his journey, Bilbo said goodbye to Gandalf. He talked with Frodo before departing the Shire, sternly cautioning him not to use the Ring.

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