Despite dominating large portions of the game and spurning numerous opportunities to put the game to bed, including a penalty which Dirk Kuyt missed, a 92nd minute Robin van Persie strike meant it was Arsenal who walked away with the spoils.
That goal helped inflict the Reds' first defeat at Anfield this season while their record on home soil now reads just four wins, eight draws and one defeat having scored only 15 goals.
Finding the back of the net has been a problem for the Merseyside club this season – they have the worst attempts to goals conversion ratio in the Premier League – while they have hit the woodwork the most times (21) and missed the most penalties (six).
Dalglish once more lamented his side’s wastefulness in front of goal and said that he would prefer to win 'ugly' rather than dominate games and still lose.
“The performance was outstanding, the result is the disappointing thing,” Dalglish told the Liverpool Echo.
“I think maybe that might be the next education for us – to be ugly and win.
“I think we’re competitive alright. The stats you’ve mentioned there (21 efforts against the woodwork this season and six missed penalties) tells you we’re pretty attack minded, we can go forward, we can create chances, we can get penalties – maybe now the next bit is to be ugly and get a winning goal.”
The loss seriously dented the Reds hopes of Champions League qualification via league position, with ten points now separating them from Arsenal, who occupy the fourth and final spot.
There were few signs of complacency following Liverpool’s Carling Cup final win over Cardiff at Wembley in their last outing, and Dalglish declared himself pleased with almost everything he saw, describing his side’s performance as ‘fantastic’.
“If you want to gauge the performance on points, then you’d be disappointed. If you want to gauge it on performance I think they were fantastic,” the Scot commented.
“There’s always some scepticism about the reaction to having won a trophy the week before, but I think they showed you how they reacted and responded.”