"I said that is not going to happen. We are not here to be invincible, we are here to be champions," said Guardiola.
"We are calm, we move forward, it is part of the competition. There is no sport in the world: tennis; basketball; golf that one team win always. When people are saying that they are selling an illusion.
"It's part of the competition. You can lose, but it is how you lose."
And Guardiola warned that City's dreams of winning the Champions League for the first time this season could end in a similar fashion if they don't learn to kill games against the toughest opposition when they are on top.
"That is the Champions League level. People say Man City are favourites for the Champions League. That is what is going to happen in the future on the biggest stages, but the way we played today is absolutely incredible."
With their loss and Liverpool's 4-0 victory Saturday over Bournemouth, the Citizens (41 points) have dropped to second in the English-league standings and the Reds (42 points) are now in first.
Chelsea is in third with 34 points, just ahead of red-hot crosstown rival Arsenal based on goal differential.