James Oberweis, editor of the Oberweis Report, says growth investing is back in favor, and he thinks two smaller aggressive-growth companies will profit from the trend.

Psychologists have repeatedly documented that the human mind tends to overweight recent experience when forecasting the future.

However, in the end, math beats emotion in investing. The most favorable risk/reward opportunities tend to fall after a period in which our style has been out of favor. For example, at the end of last year, value stocks were all the rage. After underperforming value stocks six out of the past seven years, growth stocks were cheap. This year the tide shifted and growth has returned to favor.

Although year-by-year results can be volatile, disciplined investors who remain fully invested in a portfolio of high-growth equities have historically achieved an exceptional average rate of return over long periods of time.

NetSol Technologies (NASDAQ: NTWK) is a leading global IT solutions and services provider to the financial services industry. The company offers solutions within two principal segments, enterprise software and IT outsourcing.

Within the enterprise software segment, the company currently [provides] three primary product offerings. LeaseSoft is a core accounting and portfolio management solution for asset finance, consumer finance, loan finance, and motor finance. LeaseSoft is sold primarily in the Asia-Pacific region, with China showing significant growth and representing its number-one revenue generating market.

LeasePak, a Web-based lease origination solution for dealers, vendors, brokers, and remote sales forces, is sold primarily in the US. InBanking is a newer product suite offering an end-to-end solution for front, middle, and back-office treasury requirements.

In the company’s latest reported fourth quarter, sales increased approximately 84% to $8.6 million from $4.7 million in the fourth quarter of last year. NetSol Technologies reported earnings of seven cents per share in the latest reported fourth quarter, versus a loss in the same quarter of last year. (The stock closed above $3.00 Wednesday—Editor.)

Silverstar Holdings (NASDAQ: SSTR) is an international publisher and developer of interactive entertainment software. It currently owns Empire Interactive, a leading developer and publisher of interactive entertainment software games, including Starsky & Hutch, Big Mutha Truckers, Ford Racing, and FlatOut. Empire’s products are delivered on both console and PC platforms.

Strategy First is a developer and worldwide publisher of entertainment software for the PC. Silverstar plans to release at least 50 [items] during the fiscal year ending June 2008. Most prominent among these will be the North American release of FlatOut Ultimate Carnage on Xbox 360 on October 2nd. In the company’s latest reported fourth quarter, sales increased approximately 161% to $12 million from the fourth quarter of last year. Silverstar Holdings reported earnings per share of 24 cents in the latest reported fourth quarter versus a loss in the same quarter of last year. (The stock closed below $4.00 Wednesday—Editor.)

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