Blanch bacon with 1 cup of water in a nonstick pan, to render and give off enough fat to fry with. Remove bacon into a bowl and set aside.
In the same pan, throw the beef cubes in, few pieces at a time. Sauté until nicely brown on all sides using rendered fat from bacon and 2 tablespoons of olive oil. Then remove browned beef from the pan into the bowl with bacon and set aside.
In the same fat and pan, brown cubed carrots and sliced onions. Poured out excess fat before the meat and bacon are put back into the pan. Then toss with salt, pepper and flour to coat lightly the meat. Cook till flour in meat turns brown with a light crust. Turn meat and vegetables once while cooking.
When done, remove the meat and vegetables into a large casserole. Deglaze the pan with red wine, pouring it into the casserole along with the beef stock, almost to cover the meat and vegetables. Stir in the tomatoes and added the herb bouquet. Bring to a simmer and covered. Regulate heat so that liquid simmer very slowly for 4 hours or until the meat is tender and sauce has reduced. It is worth checking the meat every hour and if the level of liquid drops, gradually add half a cup each of the beef stock and red wine.
When the stew is done, prepare the shallots and mushrooms. Heat 1 tablespoon of olive oil and stir in 2 tablespoons of butter in a skillet, add shallots and sauté over moderate heat, gently rolling them till brown evenly. Then add 1 cup of the stock left, salt and pepper and the same herb bouquet used in the stew. Cover and simmer slowly until the shallots are tender, and the liquid evaporates. Then remove the herb bouquet and set the shallots aside.
In the same skillet, heat remaining oil and butter over high heat and add the mushrooms, tossing them till brown slightly. Then remove from heat. Set the mushrooms aside until needed.
Pour the contents of the casserole into a sieve set over a saucepan. Simmer the sauce for 2 minutes in the saucepan, allowing the sauce to reduce gently, to give a rich finish to this dish. Season carefully with salt and pepper.
Wash out the casserole and put back to heat and return the meat and vegetables. Pour sauce over the meat and vegetables into the casserole. Add in the shallots and mushrooms. Cover and simmer for another 2 minutes, gently basting the meat and vegetables with the sauce several times.
Serve hot in a casserole or arrange on a stew platter over mashed potatoes or favorite cooked pasta and garnish with parsley.