1. Preheat your oven to 300°F (150°C).

2. In a large Dutch oven or heavy pot, cook diced bacon over medium heat until crispy, then remove the cooked bacon and set it aside.

3. Next, add butter to the pot and melt it. Add beef cubes and cook until browned on all sides, which should take about 5 minutes. Remove the browned beef from the pot and set it aside with the bacon.

4. Now, add mushrooms to the pot and cook until they release their liquid and start to brown, which should take about 5 minutes. Add garlic and cook for an additional minute.

5. Sprinkle flour over the mushroom mixture and cook for 1 minute, stirring constantly to avoid lumps.

6. Add water, bay leaves, beef broth, thyme, carrots, parsnips, red wine, and tomato puree to the pot. Bring the mixture to a boil, then cover the pot and transfer it to the preheated oven.

7. Braise the stew for 2-3 hours, or until the beef is tender and the vegetables are cooked through.

8. Remove the pot from the oven and season the stew with salt to taste. Serve hot, garnished with chopped fresh herbs if desired.