I urge you to read the MarketWatch report for details, and the January 7 report by Charles Noh of Value Line, -- neither of which are negative BTW -- and make up your mind on this deal before you let Wall Street spin you.

Already, minutes after the deal is announced, Warren Buffett, chairman and CEO of Berkshire Hathaway is saying: "This merger is going to create the greatest consumer products company in the world...It's a dream deal. To quantify that, I intend to purchase enough shares so that by the time the deal is closed, we will have 100 million shares of P&G."

I don't care if he happens to be the biggest shareholder in Gillette, how is that He (He's not God) happens to get the deal presented to him, and have it all figured out ahead of time, so that He can join the Wall Street spin before you get up for your morning coffee?

Apparently Berkshire currently holds 96 million shares of G, which is equivalent to 93.6 million PG shares. P&G will pay 0.975 PG shares for each G share, valuing G at $53.94. That is a shocking premium of 18 percent over today's price of $45.85, and 37 percent over where G traded within the past 90 days.

Of course Buffett would love that deal! It's a stupid deal. But why would he want to buy billions more of PG stock at the top of the price cycle, at premium prices?

And you were taught that Warren Buffett is the master of value investing! Ha!

Moreover, PG's offer is over 33 times G's current earnings, and we all know Gillette is no rocket technology. In fact, Gillette stock has just poked its head above the average price levels of the 1990s. The mid-1990s, for Pete's sake!

This deal is actually all about cost-containment because in reality a lot of overhead could be cut and the monies invested in marketing and promotion. The real point here, which I didn't miss, is that PG needs to do this deal for that reason.

The deal is also all about PG shares having risen by a third in the past two years, giving it a strong currency to acquire Europe's Wella last year in a $5 billion deal and now Gillette, which P&G has been trying to buy for several years now and previously was rejected.

P&G's chairman says "Gillette and P&G have similar cultures and complementary core strengths in branding, innovation, scale and go-to-market capabilities, making it a terrific fit".

That's true. PIG will now own 21 consumer brands that have more than a billion dollars each in annual sales, names like Tide, Swiffer, Cascade, Febreze, Cheer, Bounce, Olay, Head & Shoulders, Herbal Essences, Secret, Tampax, Pampers, Charmin, Bounty, Crest, Pringles, Folgers;and now, apparently, Gillette.

Operationally, they would like to cut 4 percent of their combined work force of 145,000, say 6,000 employees, which probably means less than a 1 percent cut to PG staff and 15 percent of Gillette's, mostly in Boston. Boston will also lose the Gillette head office.

Procter & Gamble's 2004 sales were $51.4 billion and Gillette's $9.25 billion. Pricing power has been a challenge and commodity prices of their raw materials have been rising quickly, so to continue pushing out annual earnings growth in the 9 to 10 percent range, this was a deal P&G says they needed to do. But, at what cost to the shareholders?

Paying over 33 times earnings for a dog like Gillette is highly dilutive. To reduce shareholder dilution, PIG says they intend to repurchase $18 billion to $22 billion of PG stock over the next 18 months. Other than maybe $ 3 billion in available cash in the combined treasury, where is this money going to come from? For sure there won't be PG dividend increases for a while.

In 1999, PG stock ran up to $60, which I wrote in my Dow 30 Journal was a complete and utter joke. This was not an Internet company, but when it was trading at well over 40 times earnings, the clowns from Wall Street were performing daily in the CNBC circus tent, telling you and me to buy the stock higher.

In December 1999, a couple weeks before PG stock totally collapsed " and I call a 50+ percent fall in eight weeks a total collapse " there was not a single Wall Street sell-side "advisor" that had a "sell" rating on PG.

Let me re-print what I published about it at the time. First, hide the children, because I told my readers that Wall Street was using PG (and others like GE) at the time to steal your pensions and your kid's educational funds. It was shameless what Wall Street did to the independent investor at that time, and now I see they are going back to pick the bones clean.

But, today " you watch " 100 percent of the clowns parading on CNBC will tell you this PIG can fly. Don't you believe it.

I don't care what consumer packaging they put on it, or color or label, I for one know that PIG's can't fly.

In my view PG stock peaked out in September 2004 at these current price levels. PG has a current PE of about 23, and it should really be trading at about 17. Commodity prices will push down against profit growth. And when P&G take their Head & Shoulders and their Herbal Essences into the emerging economies of China say, I just have to think the Chinese could give a whit about Madison Avenue's brand image making.

I suppose I haven't hidden my disappointment over this deal. Until today " even with the shock of 1999 " I had PG as a core component of my portfolio. Unfortunately, there is no room for a PIG.

The PG will probably trade marginally higher now for several weeks, fortunately for those who wish to exit their positions.

BCara@BillCara.com