Preheat Oven - Set the oven rack to the lower third position. Preheat to 350ºF (177ºC).
Prepare Beef - Thoroughly dry the surface of the beef with paper towels. Cut into 2-inch thick cubes, then season with salt and pepper and set aside. If needed, dry again before adding to the pan.
Saute Bacon - Heat a large dutch oven over medium heat. Add bacon and saute until crisp, about 6 to 7 minutes. Use a spoon to transfer the bacon to a paper towel-lined plate, reserving the fat in the pan.
Cook Beef - Heat bacon grease over medium-high heat. Once the fat is hot, add beef to the pan in a single layer, and work in two batches. Sear the meat on each side until browned, about 1 to 2 minutes per side, 6 to 8 minutes total. Transfer to the plate with the bacon. Repeat with remaining beef.
Cook Vegetables - Turn the heat down to medium and add the carrots, sliced onions, and pearl onions to the pan. Saute until the onions are lightly browned and tender, 10 minutes.
Make Sauce - Add the thyme and bay leaf, and saute for 30 seconds. Add the garlic, and saute for 30 seconds. Add the tomato paste and saute for 30 seconds. Sprinkle in the flour, stir and cook for 1 minute. Slowly stir in the beef stock. Add in the wine, this will help the flour thicken the sauce.
Cook in Oven - Add in the browned beef and bacon, and bring the liquid to a simmer for 5 minutes. Cover and carefully transfer the pot to the oven. Cook until the meat is very tender, about 1 ½ to 1 ¾ hours.
Saute Mushrooms - Meanwhile, prepare the mushrooms. Heat a large skillet over medium heat. Add olive oil and butter. Once hot and bubbling, add the mushrooms. Saute until tender and lightly browned, 5 minutes. Sprinkle with ¼ teaspoon salt, and cook for 2 minutes.
Reduce Sauce - When the beef is done cooking, transfer the meat and vegetables to a medium bowl. Bring the sauce to a rapid simmer over medium heat. As the fat rises to the surface, use a spoon to skim off the excess fat. Reduce the sauce until it can lightly coat the back of a spoon, about 2 to 2 ½ cups. The sauce will thicken as it cools—taste and season with more salt and pepper as desired.
To Serve - Return the meat, vegetables, and mushrooms to the pan, and stir to warm. Garnish with chopped parsley.
Notes
Wine Selection: Chose a full-bodied, dry, fruity red wine from France, like Burgundy Cotes du Rhone, Beaujolais, or Bordeaux-St. Emilion.
Make it Gluten-free: Substitute all-purpose flour with arrowroot flour (starch/powder) Bob’s Red Mill recommended.
Side Dish Suggestions: Mashed potatoes, rice, or noodles.
Storing: Store in an airtight container in the refrigerator for up to one week. Freeze in a resealable plastic bag for up to 3 months, and defrost before using.
Reheating: Cover and microwave on high in 30-second intervals, stirring in between, until hot. Alternatively, warm on the stovetop over medium heat until hot.