Micky Adams felt Tranmere did more than enough to topple high-flying Luton as his unbeaten reign at Prenton Park ceased.
Rovers had not lost in five ahead of their trip to Kenilworth Road, but a solitary second half strike from Ricky Miller was enough to secure the Hatters all three points.
And although Adams was disappointed with the result, he thinks his players can take plenty of confidence from their performance.
“We’ve come to one of the favourites and acquitted ourselves very, very well,” he said.
“If you’re ever going to lose a game of football, you do it in the style we’ve done it today, where we’ve all had a go.
“Ultimately, it’s a defeat, and we’re disappointed with that, but I think we can take a lot of positives.
“In the final third, we’re still lacking confidence in front of goal.
“But, having said that, some of the interplay we had to get into the final third was very, very good. It’s just the end delivery.
“We’ve disappointed with the goal, we think that could have been avoided, but we’ve created numerous chances.
“They were hanging on. But for a fantastic save from the ‘keeper, we would have come away with a point, and I think we would have deserved that to be honest.”
Rovers are still without a win since the end of August, and are only off the bottom of the Football League on goal difference.
But Adams says insists they are continuing to develop, and has told his players to take heart from how they performed against a side who he thinks underestimated their abilities.
“You’ll go home and look at the newspapers and the league table, if you’re daft enough to, and you’ll believe you’re a poor side,” he continued.
“I think you’ve seen enough from us recently that we’re fast improving.
“We’re not looking at the bottom of the table. We’re looking at the top end.
“That’s how confident I am in the group that we’ve got.
“I’m not saying that Luton were complacent today, but certainly I think we took them a little bit by surprise with the quality that we had.
“They had to dig deep to get any sort of result.
“Next week [against Southend], it’s our home patch, the onus is on us. We’ll try our best to get that allusive league win.”