iTunes playlist puzzle

I'm running iTunes 11.1.5 under Mavericks 10.9.2. Because I have a very large music collection I keep it on an external drive. I have six recorded lectures I'd like to sync with my iPad. How do I create a new playlist based on the recordings on the external drive. All four New Playlist options are currently not selectable. I know it can be done because I've done it before years ago but have forgotten how.



Yes, I too wish iTunes were more coherent and less convoluted.



Appreciated.

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