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There is some truth to that (when I got a REALLY nice guitar after going from crappy to semi nice for several years, I sounded about 5 years better immediately), but I think that had I owned better gear when I first started, the actual sound of the instrument would not have been as objectionable and I would have wanted to practice more.
Also, shitty drums suck way worse to play on than most shitty guitars.
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