Yeah, I have to agree with the statement but that doesn't mean you are a fool for continuing the pursuit. Every small increase in fidelity brings me pleasure. Let your wallet and your conscience be your guide.
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I think it might usually be a little dangerous to try define the boundaries of this hobby.
Whatever rule you think you might be inclined to come up with that seems to fit, then along comes the exception that disproves it. I’d say there are, in the end, maybe more exceptions to the hobby than clear rules.
Maybe more than anything else then, this hobby is really all about the exceptions.
Only this one tiny little part is correct:
is not therefore about spending large amounts of money to effect step change and realize "night and day" improvement, but rather a gradual process
All the rest is off base. Especially the nonsense about speaker selection being the biggest part. Not even close. 80% is of course arbitrary, both the number and whatever subjective nonsense goes into assigning it. There are indeed very important differences between entry, mid-fi and high end, just as there are differences between the different components within each of those arbitrary levels.
The one useful bit of the whole thing is the idea that the main difference between a good system and a great one need not have anything to do with the cost or even the quality level of the components. A really nicely set up system with all the right tweaks can easily outperform much more expensive and highly regarded gear. It can even be "night and day" better. But it will only get there by painstakingly gradual tiny little incremental improvements.
Mahgister had a great post about this recently. His view is there are three main levels- call it low-, mid- and high-fidelity, which roughly breaks down into mainstream, audiophile, and cost no object SOTA audiophile. He sees no point upgrading. Unless you can jump to the next level you should tweak small changes. Having seen myself how many small changes can be made and how much they can all add up to I have to say he makes a pretty good point.
Either way it is indeed a gradual process.
I discovered in my messy audio room that ALL audio system that are already relatively good are better, way better than we think; we underestimated what we have and spend money on new electronic components, instead of addressing, the vibrations-resonance controls, the acoustical treatment of the room, the electrical embedding of the system in the room and in the house, and others simple tweaks to decrease the noise floor...
Most of the times we think about upgrading with the wrong idea, but transforming the potential of what we already have is the right path of an audiophile; anybody can buy something that will create the real or false illusion of an upgrade; real, because a 100 bucks amplifier is way less good than a 10,000 one for sure, but an illusion tough, because the same guy will never know how good was the sound of this 100 bucks vintage mythic amplifier (mine is) in an optimal embeddings...
My room is messy indeed, my audio system low cost, but the sound is absolutely not messy, and cost me a lot of thinking and times...