New Portfolio Ready for Year-end Sprint

Ever since I started to contemplate the addition of Adobe (ADBE) to the folio Apple (AAPL) has haunted me. Do I have an apple or do I add adobe spice? Lately, I’ve been seeing a lot more Macs around the way, so there’s no doubt that Apple is moving trailer loads of laptops. And I can’t help but feel like the only one in New York without an iPod. But won’t the iPod eventually go down the same memory lane as did the Sony Walkman? Also, Macs may be selling like hot cakes but the computer hardware business is less profitable than software. iTunes rocks, but its sector seems to have a low barrier to entry.

Meanwhile the list of vendors with platforms that run on ADBE’s products seems to get longer by the day…MSFT, Apple, YouTube (now part of Google), MySpace (now part of News Corp.), Yahoo, etc. ADBE’s revenue base is more diversified than Apple’s. So an apple a day may keep the doctor away, but I’d rather have some spice.

ADBE pulled back in trading yesterday so I jumped in to buy some. Better buy now than wait till November when ADBE starts to release all those new products in the pipeline. The addition of ADBE jolts the folio and some reallocation is induced. PG, IGE and SLV shed the most weight to make way for ADBE.

The worst-known manager often reallocates the folio to accommodate new entrants and to position the folio for seasonal changes. Technology and energy are probably the two sectors best poised to benefit from a combination of holiday season spending and colder weather this quarter.

The Organization for Petroleum Exporting Countries (OPEC) has surprised the market with a bigger-than-expected cut in oil production that takes effect from November 1, just as colder weather starts to eat away at those high crude and heating oil inventories that have kept oil prices down. Techs, in particular software players, do not feel as much squeeze from rising oil prices as consumer staples (PG) and consumer discretionary (COST).

Ok, so what's the tactic behind the Q4 shuffle? Voila:

Likely to benefit the most from high oil prices: IGE, PBW, SLV, EEM, and EFA

Likely to benefit the most from low oil prices: PG, COST, EFA, IWR, IJR, EBAY, ADBE and MSFT

Don’t care much about oil price: MSFT, ADOBE, EBAY, and EFA

Likely to benefit the most from higher consumer spending: COST, MSFT, ADBE, EBAY, EFA, IJR, and IWR

I can't wait for the new folio to get to work on Monday.